Tamilnad Mercantile Bank Limited has informed the Exchange regarding Monetary Demand raised by the Assessment Unit, Income Tax Department - Intimation under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
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On the reaction day the stock moved 1.8 pts less than Nifty Microcap 250 and 1.7 pts less than its Private Sector Bank peers, over the same two closes: a difference in percentage points, not a measure of what the filing did.
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The Income Tax Department's Assessment Unit has issued a notice of demand of Rs. 204.23 crore (Rs. 2,04,23,11,454) against Tamilnad Mercantile Bank, received on March 18, 2026. The demand relates to disallowance of a tax claim made under Section 36(1)(viia) of the Income Tax Act, which pertains to provisions for bad and doubtful debts, for Assessment Year 2013-14. The order was passed under Section 147 read with Section 254 and Section 144B of the Income Tax Act. The bank has stated it is in the process of filing an appeal and expects the matter to be resolved in its favour. The bank has clarified that this demand would not have a material impact on its financial statements.
The large tax demand may create short-term negative sentiment among investors, but the bank's confidence in winning the appeal and its assurance of no material financial impact should limit downside. Investors should watch for updates on the appeal outcome.