Home Business Income Tax Department to refund Infosys ₹6,329 crore in windfall tax refund

Income Tax Department to refund Infosys ₹6,329 crore in windfall tax refund

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Infosys Ltd is set to receive a tax refund of ₹6,329 crore, but it also faces a hefty tax liability of ₹2,763 crore according to assessment orders.

The directives follow various provisions of the Income Tax Act of 1961. These refunds, along with accrued interest, pertain to assessment years spanning from 2007-08 to 2018-19.

“The company stated in a release to the exchanges that it is currently assessing how these orders will impact the financial statements for the quarter and year ending March 31, 2024.”

However, in the assessment year 2022-23, including interest, Infosys faces a different tax liability compared to the previous demand of ₹4 crore for the assessment year 2011-12.

In the fiscal year 2022-23, the company reported consolidated income tax expenses of ₹9,214 crore, a significant increase from ₹7,964 crore in the previous fiscal period.

The company clarifies that its income tax expense includes both current and deferred income tax components.

Notably, during the quarter ending in December, the company recorded an income tax expense exceeding ₹2,500 crore.

These tax assessments extend to Infosys subsidiaries, which have also received assessment orders from the income tax department. Together, these orders total a tax demand of ₹277 crore, including interest, spanning assessment years from 2018-19 to 2021-23.

The Bengaluru-based company mentioned that it is currently evaluating how these instructions will affect its financial records and is contemplating the option of appealing against them.

Additionally, an Infosys division is slated to receive refund directives under various provisions of the same law, totaling ₹14 crore, spanning assessment periods from 2007 to 2009 and 2016 to 2017.

The company added, “Furthermore, a subsidiary of the Company has received refund orders under Section 254 for assessment years 07-08 and 08-09 and under Section 154 for assessment year 16-17. The refund amount as per these orders is INR 14 crores. The Company is in the process of evaluating the implications of these orders on the financial statements for the quarter and year ending March 31, 2024.”

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