Zydus Lifesciences falls after Rs 285-crore tax notice to subsidiary

Shares of Zydus Lifesciences Limited declined over a percent to Rs 666 in early trade on December 27 after the company announced that its wholly owned subsidiary Zydus Healthcare Ltd has received a demand notice of Rs 284.58 crore under Section 143(1) of the Income Tax Act, 1961.

The income tax department’s Centralised Processing Centre (CPC) issued an intimation pointing out apparent errors in the processing of ZHL’s income tax return for the assessment year 2023-24, the company said in an exchange filing on December 27.

At 9:35am, the counter was trading at Rs 669, down 1 percent from the previous close on the NSE. Since the start of the year, the company has given a stellar return of 62 percent on the exchanges.

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The issues identified encompass the disallowance of claims for deduction under Sections 80-IE and 80-JJAA of the Income Tax Act without a basis, as well as a deficiency in crediting taxes deducted or paid. ZHL has challenged these determinations, expressing confidence that, upon rectification, the entire demand will be nullified.

“ZHL has already disagreed with the demand on the e-filing portal of the Income Tax Department. ZHL is also going to file a Rectification Application under section 154 of the IT Act before the CPC as well as before the Jurisdictional Assessing Officer against the said intimation,” the company further said.

The drug maker also said that with the assessment and advice of the learned counsel, ZHL does not expect the said intimation to have any material financial impact.

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