Bajaj Electricals in focus after receiving Rs 19 crore demand notice from Income Tax Department
Bajaj Electricals has received the demand notice from the I-T Department over paying a reduced corporation tax rate under Section 115BAA of the IT Act for AY 2022–23, which came into effect for domestic companies from AY 2020–2021.
Bajaj Electricals shares were under radar on Monday after the company disclosed about receiving a Rs 19.72 crore demand notice from the Income Tax Department.
The notice was issued by the Deputy Director of the Central Processing Centre (CPC) in Bengaluru for the Assessment Year (AY) 2022-23, the company said in a filing to the stock exchanges on Friday. Bajaj Electricals had previously opted for the reduced corporate tax rate, as stipulated under Section 115BAA of the Income Tax Act.
This provision, introduced for domestic companies in the Assessment Year 2020-2021, seeks to alleviate tax burdens. However, the Income Tax Department's demand notice, based on the standard tax rate, presents a fiscal challenge for the company. The company is going to file an application with the Income Tax authority to address the issue.
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“The Company has received an intimation dated August 24, 2023, under Section 143(1) of the Income Tax Act, 1961, from the Deputy Director of Income Tax, Central Processing Centre (CPC), Bengaluru, whereby the Income Tax Authority has claimed an alleged demand of Rs.19.72 crore for AY 2022-23,” Bajaj Electricals informed bourses.
Meanwhile, the National Company Law Tribunal (NCLT) in Mumbai granted approval to the Schee of Arrangement (SOA) between Bajaj Electricals and Bajel Projects. This strategic arrangement, given the nod on June 8th, 2023, is slated to take effect from September 1st, 2023. The SOA marks a significant step for the company as it seeks to optimize its operational structure.
Bajaj Electricals share price
Bajaj Electricals shares were trading flat at Rs 1,131.45 apiece, up 0.04 per cent, on BSE at 12:13 PM on Monday. The stock opened marginally higher from its previous close on Friday and gained nearly 0.58 per cent to hit a high of Rs 1137 apiece on BSE.
The Bajaj Group stock is under pressure since the beginning of the month. The stock has lost more than 10 per cent this month since August 1. Shares of Bajaj Electricals have dropped more than 8 per cent in the past three months and more than 6 per cent so far this year. In the past one-year period the stock has lost over 7 per cent.
Excerpt: Bajaj Electricals has received the demand notice from the I-T Department over paying a reduced corporation tax rate under Section 115BAA of the IT Act for AY 2022–23, which came into effect for domestic companies from AY 2020–2021.