Companies & Sectors
I-T department slaps Rs582 crore tax demand notice on Infosys

The Bangalore-based software services exporter is already contesting additional I-T demands of $214 million (about Rs1,175 crore) for four fiscals years beginning 2005 and said it will take legal recourse against the fresh tax demand notice as well

 
The Income Tax (I-T) department has slapped a fresh $106 million (about Rs582 crore) tax demand notice on software services major Infosys, for the fiscal 2008-09.
 
The Bangalore-based software services exporter is already contesting additional income tax demands of $214 million (about Rs1,175 crore) for four fiscals years beginning 2005 and said it will take legal recourse against the fresh tax demand notice as well.
 
“The company has received the assessment order from the income tax authorities for fiscal 2009 on 2 May 2013 along with a demand order for an amount of $106 million,” Infosys said in a filing to the US Securities and Exchange Commission (SEC) last week.
 
In the filing Infosys added, “As the company is contesting this position like earlier years, the appellate authority would be approached within the time limit prescribed under the relevant law.”
 
Infosys is already facing tax demands worth $214 million for fiscal 2005 to fiscal 2008 “mainly on account of disallowance of a portion of the deduction claimed by the company under Section 10A of the Income Tax Act.”
 
“The company has received demands from the Indian I-T authorities for payments of additional taxes totalling $214 million, including interest of $62 million upon completion of their tax review for fiscal 2005, fiscal 2006, fiscal 2007 and fiscal 2008,” it said in the filing.
 
The deductible amount is determined by the ratio of export turnover to total turnover. The disallowance arose from certain expenses incurred in foreign currency being reduced from export turnover, but not reduced from total turnover, it added.
 
The tax demand for fiscal 2007 and fiscal 2008 also includes disallowance of portion of profit earned outside India from the STP units and disallowance of profits earned from SEZ units, it said.
 
“The matter for fiscal 2005, fiscal 2006, fiscal 2007 and fiscal 2008 are pending before the Commissioner of Income tax (Appeals) Bangalore,” Infosys said in the filing.
 
Infosys added that its position in the cases relating to tax demands is strong and it expects to win the appeal.
 
“The company is contesting the demand and the management, including its tax advisors, believes that its position will likely be upheld in the appellate process.
 
“The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the company's financial position and results of operations,” it added.
 
On taxes in India, Infosys said in the filing, “The company, as an Indian resident, is required to pay taxes in India on the company's entire global income in accordance with Section 5 of the Indian Income Tax Act, 1961, which taxes are reflected as domestic taxes.”

User

Indian market trends

The Sensex and the Nifty advanced 3% each during the fortnight. ML Large-cap Index went up 5%...

Premium Content
Monthly Digital Access

Subscribe

Already A Subscriber?
Login
Yearly Digital+Print Access

Subscribe

Moneylife Magazine Subscriber or MSSN member?
Login

Yearly Subscriber Login

Enter the mail id that you want to use & click on Go. We will send you a link to your email for verficiation
Fund flows

Foreigners: Foreign institutional investors were net buyers of stocks (Rs7,617.85 crore)....

Premium Content
Monthly Digital Access

Subscribe

Already A Subscriber?
Login
Yearly Digital+Print Access

Subscribe

Moneylife Magazine Subscriber or MSSN member?
Login

Yearly Subscriber Login

Enter the mail id that you want to use & click on Go. We will send you a link to your email for verficiation

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)