Infosys has been slapped a fresh Rs 582 crore ($106 million) tax demand notice by the Income tax department.
According to a filing to the SEC, India’s second largest software exporter has said that this is the tax the company is due to pay for the 2009 fiscal.
This is in addition to the Rs. 1,175 crore ($214 million) that the tax department says that Infosys owes, for the four fiscal years from 2005 onwards, a claim that Infosys is contesting.
Commenting on this, an Infosys spokesperson said: “We have received the assessment order for the assessment year 2009- 10 demanding a net tax of Rs. 577 crore. The assessment followed the order of the Assessment Year 2007-08 and 2008-09 that did not allow tax benefits on income from onsite software development revenue from SEZ, disregarding the latest clarification issued by the CBDT and Infosys is in the process of filing an appeal before the Commissioner of Income Tax.”
This is mainly on account of disallowance of a portion of the deduction claimed by the company under Section 10A of the Income Tax Act.
According to this Act, a company can gain 100 per cent deduction of profits and gains derived by an undertaking from export of articles or things or computer software manufactured or produced by it. The deduction is available for a period of ten consecutive assessment years, beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce such articles.
Further, in the filing, Infosys added that as the company is contesting this position like earlier years, the appellate authority would be approached within the time limit prescribed under the relevant law.
Source:- http://www.thehindubusinessline.com/
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