Tech giant Infosys receives tax demand of Rs 341 crore from the Income Tax department

Indian tech giant Infosys has been slapped with a tax demand of Rs 341 crore for the assessment year 2020-21 by the Income Tax Department, India. The demand includes interest and stems from an order received by the company on March 31, 2024.

The company said it is currently assessing the impact this order may have on its financial statements for the quarter and year ending March 31, 2024. Notably, It is also considering filing an appeal against the tax demand.

What did Infosys say?

"Infosys Ltd (‘the Company’) on March 31, 2024, received order under Section 201 & 201(A) of the Income Tax Act, 1961 from the Income Tax Department, Government of India for assessment year 20-21 with a tax demand of INR 341 crores (including interest). The Company is in the process of evaluating the implications of this order on the financial statements for the quarter and year ending March 31, 2024, and also evaluating filing appeal against this order," the company said in an exchange filing. 

Subsidiary receives refund

In a twist of financial fate, a subsidiary of Infosys has been granted a tax refund of Rs 15 crore for the assessment year 2014-15 under Section 154 of the Income Tax Act, 1961.

The development comes alongside the tax demand. The company said it is in the process of evaluating the implications of this refund on its financial outcomes for the same fiscal period.

"Further, a subsidiary of the Company has received refund order under Section 154 of the Income Tax Act, 1961 from the Income Tax Department, Government of India for assessment year 14-15. The refund amount as per the order is INR 15 crores. The Company is in the process of evaluating the implications of this order on the financial statements for the quarter and year ending March 31, 2024," the company added.

Context of recent tax developments

The tax demand and refund orders are part of a broader narrative involving Infosys and the Income Tax Department.

Recently, Infosys announced its anticipation of a significant tax refund amounting to Rs 6,329 crore for various assessment years ranging from 2007-08 to 2018-19, alongside a notable tax demand of Rs 2,763 crore for different assessment years, including 2022-23 and others.