Tata Capital faces ₹413 crore income tax reassessment for FY 2017-18, plans appeal – CNBC TV18

Non-banking financial company Tata Capital Ltd on Saturday (March 21) said it has received an Income Tax reassessment order, pertaining to the financial year 2017-18. The order was issued on the Income Tax website on March 20, 2026, and downloaded by the company on March 21, 2026.

The reassessment, issued by the Deputy Commissioner of Income Tax, Circle – 2(3)(1), Mumbai, pertains to Tata Capital Financial Services Ltd (TCFSL), which merged with Tata Capital Limited with effect from April 1, 2023. The total demand raised under the order is ₹413.18 crore, which includes ₹202.72 crore as interest, primarily on account of short credit of taxes paid, interest levied, and certain disallowances.

While computing tax liability, the assessing officer, instead of allowing credit of taxes paid by Tata Capital Financial Services Ltd aggregating to ₹225.89 crore as claimed in the income tax return, applied an incorrect computation, resulting in a short credit of ₹209.52 crore.

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In the original assessment order under Section 143(3) dated September 29, 2021, a tax credit of ₹224 crore had been allowed for Tata Capital Financial Services Ltd. The reassessment, however, led to an erroneous interest levied of ₹202.72 crore, which forms part of the total demand.

The company noted that the entire demand is not maintainable and will file a rectification application or appeal, expecting a favourable outcome. In addition, certain disallowances for FY 2017-18, amounting to a tax impact of ₹26.31 crore, are being challenged through appeals with the Commissioner of Income Tax (Appeals).

“The company will take necessary steps to file a rectification application/appeal. The company expects a favourable outcome in respect to the above matter. Further, in respect to the Financial Year 2017-18

(Assessment Year 2018-19) of TCFSL, there are certain disallowances aggregating to a tax impact of Rs. 26.31 crores for which the company has already filed/is in the process of filing an appeal with the Commissioner of Income Tax (Appeals),” Tata Capital Ltd said.

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“Based on our current assessment, we expect favourable orders on these disallowances since there are strong grounds and judicial precedent in respect of the disallowances made in the order. In light of the above, we believe there will be no impact on the financials, operations or other activities of the company on account of the aforementioned order,” it added.

Shares of Tata Capital Ltd ended at ₹317.25, up by ₹4.35, or 1.39%, on the BSE.

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