Infosys, the country's second largest software exporter, has received a tax refund of ₹6,329 crore from the Income Tax Department, as announced in their exchange filing. However, the company is also facing a tax demand of ₹2,767 crore for assessment orders issued by the I-T department. This news caused a rise in Infosys' shares by nearly 2% in the opening trade on Monday, extending gains for the second consecutive session. The company is currently evaluating the implications of these orders on its financial statements for the quarter and year ending March 31, 2024, and is also considering filing appeals against these orders. The board of Infosys is set to meet on April 18 to approve its financial results for the January-March quarter, which will kick-off the March quarter earnings season.
Infosys Receives Tax Refund and Faces Tax Demand
Infosys, India's second-largest software exporter, recently announced receiving a tax refund of ₹6,329 crore from the Income Tax Department. However, the company also faces a tax demand of ₹2,767 crore for assessment orders issued by the I-T department.
Background
Tax refunds and demands are common occurrences for companies as they navigate the complex Indian tax system. The Income Tax Department reviews a company's tax returns and may issue orders for additional payments or refunds.
In recent years, Infosys has been involved in several tax disputes with the Indian authorities. In 2015, the company received a tax notice for an alleged tax evasion of ₹20,000 crore. The case is still ongoing.
Current Situation
The recent tax refund and demand have mixed implications for Infosys. The refund will provide a financial boost to the company, while the demand represents a potential liability.
The company has stated that it is evaluating the implications on its financial statements and considering filing appeals against the tax demand. The board of Infosys will meet on April 18 to approve its financial results for the January-March quarter.
Market Reaction
Infosys' shares rose nearly 2% in the opening trade on Monday after the news of the tax refund. However, the stock price later fell as investors weighed the potential impact of the tax demand.
FAQs
1. What is the reason for the tax refund?
The tax refund is related to Infosys' claim for a refund of excess taxes paid in previous years.
2. Why is Infosys facing a tax demand?
The tax demand is based on assessment orders issued by the Income Tax Department, which alleges that Infosys underpaid taxes in previous years.
3. What is the potential impact of the tax refund and demand?
The tax refund will provide a financial boost to Infosys, while the tax demand represents a potential liability. The company is evaluating the implications on its financial statements.
4. What is Infosys doing to resolve the tax dispute?
Infosys is considering filing appeals against the tax demand.
5. Has Infosys faced tax disputes in the past?
Yes, Infosys has been involved in several tax disputes with the Indian authorities in recent years, including a case related to alleged tax evasion of ₹20,000 crore.
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