Tata Capital Shares Dips 2% After Rs. 413 Crore Tax Notice; Company Says No Material Impact

Shares of Tata capital came under pressure on Monday morning, falling over 2% after the company received a hefty tax reassessment demand from the Income Tax Department. The development triggered a sharp reaction in early trade.

Tata Capital Shares Today

Tata Capital shares today opened at around Rs. 312 per share but quickly slipped to an intraday low of Rs. 310, with a decline of nearly 2.2%. The stock saw selling pressure soon after the company disclosed receiving a tax demand notice. Despite the dip, the company holds a strong market presence with a market capitalisation of around Rs. 1.31 lakh crore.

What the Notice Covers

The fall in tata capital share price comes after the company received a tax reassessment order amounting to Rs. 413.18 crore from the Mumbai Income Tax Department for the financial year 2017-18.

According to the company, the reassessment order was uploaded on March 20, 2026, and subsequently downloaded on March 21.

The total tax demand includes Rs. 209.52 crore as tax and Rs. 202.72 crore as interest. The demand primarily arises from alleged short credit of taxes paid by erstwhile Tata Capital Financial Services Ltd (TCFSL), along with certain disallowances made by the assessing officer.

The reassessment order pertains to Tata Capital Financial Services Ltd, which has now been merged into Tata capital effective April 1, 2023. As a result of this merger, the liability has been transferred to the current entity, making tata capital responsible for addressing the demand.

Tata Capital Response

Tata capital, however, has strongly contested the tax reassessment order. The company stated that it has identified "errors apparent from the record" in the computation of tax liability.

According to the firm, the assessing officer has credited only Rs. 16.36 crore as taxes paid, whereas the actual tax payments, including TDS, TCS, and advance tax, amount to Rs. 225.89 crore. This discrepancy forms the core of the dispute.

The company has clarified that it does not expect any material financial impact at this stage. It plans to file rectification applications and pursue legal remedies, including appeals, to correct the errors.

Outlook for tata capital stock

While the recent correction in Tata Capital shares reflects an immediate market reaction to the tax notice, brokerages are largely bullish on the stock's long-term prospects. Global brokerage Nomura has maintained a positive view and initiated coverage with a 'buy' rating in its latest report.
According to Nomura, "Tata Capital stands out as one of the most mature and well-diversified NBFCs in India, with an assets under management (AUM) of around Rs. 2.6 lakh crore as of December 2025. The company is currently the third-largest NBFC, as per Crisil, and benefits from strong backing by the Tata Group. The company's loan portfolio is well balanced, with nearly 60% exposure to retail lending and 40% to SME and corporate loans."

The brokerage has projected a loan growth CAGR of around 23% between FY26 and FY28, along with a return on equity (ROE) in the mid-to-high teens by FY28.

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