Aditya Birla Capital Limited has informed the Exchange regarding 'the update on tax litigation of subsidiary company'.
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Aditya Birla Capital has shared an update on two tax disputes involving its material subsidiary, Aditya Birla Sun Life Insurance Company Limited (ABSLI). For Assessment Year 2016-17, the Deputy Commissioner of Income Tax has issued an Order Giving Effect nullifying the entire tax demand of Rs. 210.30 crore after the Commissioner of Income Tax (Appeals) ruled that the re-assessment proceedings were invalid. For Assessment Year 2022-23, the tax department has issued a stay order against a demand of Rs. 184.50 crore, subject to adjustment of Rs. 15.24 crore from the refund already determined for AY 2024-25. Both outcomes are favorable for ABSLI and remove a significant tax liability overhang. The combined positive impact involves roughly Rs. 394 crore in disputed tax demands either wiped out or stayed.
Positive for shareholders — a Rs. 210 crore tax demand on the insurance subsidiary has been fully nullified and a stay has been obtained on another Rs. 184.5 crore demand, reducing earnings risk and uncertainty around the subsidiary's financials.