Bank of Baroda faces Rs 1067.82cr tax demand, plans appeal

State-owned Bank of Baroda, in a regulatory filing, stated that the bank has a demand decree of Rs 1067.82 crore under section 156 of the Income Tax Act, 1961, about AY 2017-18.

Demand Order Issued

State-owned Bank of Baroda has announced in a regulatory filing that it has received a demand order amounting to Rs 1067.82 crore under section 156 of the Income Tax Act, 1961.

This pertains to the assessment year 2017-18.

Plans for Appeal

In response to the demand order, Bank of Baroda stated, “The Bank is under the process of filing an appeal before the Commissioner of Income Tax (appeals), National Faceless Appeal Centre (NFAC)/ writ petition before Honourable High Court (as may deems fit) against the said order within the prescribed timelines.”

The bank expressed confidence in its ability to substantiate its position based on past precedents and orders of appellate authorities, expecting the demand to be nullified. They assured stakeholders that there would be no impact on the bank’s financial operations or other activities.

Financial Performance

Despite the tax demand, Bank of Baroda reported a net profit of Rs 4,886 crore for the January-March quarter of the financial year 2023-24. This represents a 2.3 percent increase compared to the net profit of Rs 4,775 crore in the same period the previous year.

Asset Quality Improvement

The bank’s gross non-performing asset (NPA) ratio improved to 2.92 percent, down from 3.79 percent in the corresponding quarter last year. Similarly, the net NPA ratio decreased to 0.68 percent from 0.89 percent a year ago.

Net Interest Income

The lender’s net interest income for the quarter was Rs 11,793 crore, slightly up from Rs 11,525 crore the previous year. However, the bank experienced a compression in its net interest margin, which fell to 3.18 percent from 3.31 percent last year.

Bank of Baroda’s proactive approach to addressing the tax demand and its steady financial performance demonstrate its resilience and strategic planning in navigating regulatory and economic challenges.