TCS gets a claim from taxmen

By siliconindia   |   Tuesday, 06 April 2004, 19:30 IST
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MUMBAI: The Income Tax department, Mumbai has asked Tata Sons, the apex holding company of the Tata group, to pay additional tax on the ground that its software services division, Tata Consultancy Services (TCS), is not eligible for certain tax benefits claimed by it, reports Economic Times. Software companies are exempt from paying income tax on their income under section 10A and 10B of the Income Tax Act. TCS has been disallowed exemption under these sections by the I-T department. The I-T department’s demand on TCS is in line with a similar tax demand on Wipro by the I-T department, Bangalore for additional tax payments of Rs 261 crore . When contacted by ET, a Tata Sons official said, “We are presently studying the assessment order.” The order was sent to Tata Sons last week. Tata Sons is now in the process of quantifying the tax demand arising from the denial of tax benefits. The assessment order has not specified the amount but only the fact that the exemption cannot be continued for “some units” of TCS. Sources say that the group or the company is likely to contest the order at the Income Tax Tribunal level.