Infosys Contemplates Appeal Against Rs 341 Crore Tax Demand for 2020-21

New Delhi, Apr 1 - Infosys, a leading IT services company based in Bengaluru, is currently facing a tax demand of Rs 341 crore for the assessment year 2020-21, as per the latest order from the Income Tax Department. The company disclosed this development in a filing with the Bombay Stock Exchange (BSE) on Monday. Alongside this, Infosys is also reviewing the potential impact of this order on its financial statements for the quarter and year ending March 31, 2024. Additionally, Infosys is contemplating an appeal against this tax demand.

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On March 31, 2024, Infosys received the tax demand notice which includes interest charges. This development comes amidst other financial evaluations by the company, including a refund order from the Income Tax Department for the assessment year 2014-15 amounting to Rs 15 crore. This refund is also under review for its implications on the financial outcomes for the fiscal year ending March 31, 2024.

Infosys has recently communicated to the stock exchanges its anticipation of a substantial refund of Rs 6,329 crore from the Income Tax Department. This expectation is juxtaposed with a separate tax demand of Rs 2,763 crore across various assessment orders. The company has received multiple orders for assessment years ranging from 2007-08 to 2015-16, 2017-18, and 2018-19 during the last quarter. These orders cumulatively suggest a refund of Rs 6,329 crore including interest.

The IT giant is also preparing to announce its financial results for the fourth quarter of the current fiscal year and for the full financial year 2024 on April 18. In addition to the tax demand for the assessment year 2020-21, Infosys has received other significant tax demands. These include Rs 2,763 crore for assessment year 2022-23 and Rs 4 crore for assessment year 2011-12, both inclusive of interest charges.

Subsidiaries of Infosys have not been spared from tax demands either. The total tax demand for subsidiaries amounts to Rs 277 crore. This includes demands for assessment years 2021-22 and 2018-19 totaling Rs 145 crore; an order for assessment year 2022-23 with a tax demand of Rs 127 crore; and another for assessment year 2022-23 demanding Rs 5 crore in taxes—all inclusive of interest.

In its recent quarterly report, Infosys revealed a net profit drop of 7.3 per cent due to sluggish client demand and revised its annual sales forecast downwards. The net profit attributable to shareholders stood at Rs 6,106 crore compared to Rs 6,586 crore in the same period last year. However, Infosys did report a slight increase in consolidated revenue from operations by 1.3 per cent to Rs 38,821 crore during the third quarter of FY24 from Rs 38,318 crore a year ago.

As Infosys navigates through these financial assessments and tax demands, it remains a key player in India's IT services market alongside competitors such as TCS and Wipro. The company's response to these challenges and its strategies moving forward will be closely watched by investors and industry analysts alike.