The company informed the exchanges that its Home Finance arm has gotten a ₹963 crore tax demand and the company’s tax demand now stands at ₹23.78 crore instead of ₹95.12 crore.
IIFL Home Finance
For IIFL Home Finance — the principal additions/disallowances in the IT authority’s assessment order relate to:
- Overriding commission (ORC) income: Approximately ₹490 crore.
- Deduction claimed under Section 36(1)(viii) of the Income Tax Act, 1961: Approximately ₹305 crore.
- Interest strip assets: Approximately ₹392 crore
- ESPO expenses: Approximately ₹53 crore.
The company said that IIFL Home Finance believes that it has substantial factual and legal grounds to contest these additions/disallowances:
- The income relating to ORC and interest strip assets has already been offered to tax, and appropriate credit for taxes/income so offered has not been fully considered.
- The issue under section 36(1)(viii) concerns the interpretation of “general reserves” for determining the applicable statutory limit.
- The treatment of ESOP expenses is contrary to the legal position relied upon by IIFL Home Finance Limited. Several of these matters have also been examined in earlier scrutiny assessments.
The company said IIFL Home Finance is pursuing the the appellate, rectification and other remedies available under applicable law. It added that at present, it does not expect the matter to have any material impact on its financial position or operations.
IIFL Finance
IIFL Finance said that in continuation of its previous disclosure regarding the block assessment order on May 12, 2026, raising a tax demand of ₹475.56 crore, the IT Authority has granted stay of recovery of the outstanding demand till December 31, 2026, or disposal of the company’s appeal before the commissioner of income tax (appeals), whichever is earlier, subject to payment of ₹23.78 crore equivalent to 5% of the disputed demand in installments up to December 15, 2026 and in compliance with the other conditions specified in the order.
In compliance with the same, IIFL Finance said it recently made payment of the first installmet of ₹5 crore on August 13, 2026. It said it is taking the necessary steps to comply with the conditions stipulated in the stay order and that there is no material impact on its business operations arising from the same,.
It added that it has challenged the assessment order before the appellate authority and the matter remains pending adjudication and the company continues to believe it has a strong case on merits.
Stock reaction
Shares of IIFL Finance fell 7.6% to hit an intraday low of ₹643.55 apiece. The stock later recovered and was trading 3.1% lower at ₹675 apiece at 10 am. It has gained 17.7% in the past month and 8.7% this year, so far.
Also Read: Sunshine Pictures shares debut at 10% premium after 106x-subscribed IPO
