Tamilnad Mercantile Bank Limited has informed the Exchange regarding rectification order received from the Income Tax Department under Regulation 30 of the SEBI (Listing Obligations and ....
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Tamilnad Mercantile Bank has received a Rectification Order from the Deputy Commissioner of Income Tax, Circle 1, Tirunelveli, which significantly reduces an earlier tax demand. The original demand of Rs. 2,04,23,11,454 (approximately Rs. 204 crore) for Assessment Year 2013-14 has been reduced to Rs. 2,93,39,404 (approximately Rs. 2.93 crore). The demand originated from the Income Tax Department disallowing a claim under Section 36(1)(viia) of the Income Tax Act, 1961. The bank states this reduced amount will not have a material impact on its financial statements.
The massive reduction in tax liability from Rs. 204 crore to under Rs. 3 crore is a significant positive development for the bank, substantially reducing its contingent liability. While the matter relates to a tax dispute from over a decade ago (AY 2013-14), the non-material classification should ease investor concerns.