In a significant development, Infosys, the renowned IT services giant, is poised to receive a substantial tax refund of Rs 6,329 crore from the Income Tax Department. This announcement comes alongside the revelation of tax demands amounting to Rs 2,763 crore, including interest, as cited in various assessment orders.
During the quarter, Infosys Ltd disclosed that it has received assessment orders from the Income Tax Department spanning multiple fiscal years, including 07-08 to 15-16, 17-18, and 18-19. The company anticipates a significant refund, inclusive of interest, as per these orders. However, it is diligently evaluating the potential financial implications of these developments for the quarter and the fiscal year ending March 31, 2024.
The Bengaluru-based IT giant, competing robustly with industry counterparts such as TCS and Wipro, is scheduled to unveil its financial results for the fourth quarter of the current fiscal year and the entirety of FY24 on April 18, adding further anticipation to these financial revelations.
In addition to the primary tax refund, Infosys has also been confronted with tax demands, including interest, for assessment year 22-23 amounting to Rs 2,763 crore, as well as for assessment year 11-12 with a demand of Rs 4 crore. Furthermore, assessment orders have been issued for its subsidiaries, collectively totalling Rs 277 crore.
These subsidiary assessments comprise orders for assessment years 21-22 and 18-19, with a total tax demand of Rs 145 crore, an order for assessment year 22-23 amounting to Rs 127 crore, and another for the same fiscal year entailing a demand of Rs 5 crore. Infosys is actively evaluating the implications of these subsidiary orders on its financial statements and is considering the possibility of filing appeals against them.
Moreover, a subsidiary of Infosys has received refund orders under Section 254 for assessment years 07-08 and 08-09, as well as under Section 154 for assessment year 16-17, with a cumulative refund amount of Rs 14 crore. As of March 29, 2024, the aggregate of these orders surpasses the materiality criteria prescribed under Regulation 30 of the Listing Regulations (as amended), prompting Infosys to make this regulatory disclosure.
In light of these developments, Infosys stands at the nexus of a substantial tax refund while simultaneously navigating tax demands and assessment orders. The company’s meticulous evaluation of the financial implications underscores its commitment to transparency and regulatory compliance amidst the dynamic landscape of tax assessments and refunds.
As stakeholders await the forthcoming financial disclosures, the outcome of Infosys’ assessment orders and its resultant impact on its financial standing will be closely monitored by industry analysts and investors alike, shaping the narrative of one of India’s foremost IT giants in the fiscal year 2024.
