Dr Reddy's gets notice for allegedly escaping INR-23.96-bln income tax
This story was originally published at 12:55 IST on 5 April 2025
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NEW DELHI – Dr. Reddy's Laboratories Ltd. on Saturday said the Hyderabad unit of the Income Tax Department has issued a showcause notice, asking why a fresh notice shouldn't be issued for allegedly escaping tax of INR 23.96 billion following the merger of its subsidiary with itself.
The notice which was issued on Friday, asked the pharmaceutical major why its income tax returns for assessment year 2020-21 (Apr-Mar) should not be reassessed. It is alleged that following Dr. Reddy's Holding Ltd.'s merger with Dr. Reddy's Laboratories, payment of tax was allegedly escaped.
The Hyderabad bench of the National Company Law Tribunal approved the scheme of arrangement on Apr. 5, 2022. While the company currently does not expect any material impact on its financials or operations at this stage, it said "there is no escapement of tax pursuant to the said merger scheme."
"The said scheme also provides that the Promoters of the Company will jointly and severally indemnify, defend and hold harmless the Company, its directors, employees, officers, representatives, or any other person authorized by the Company (excluding the Promoters) for any liability, claim, or demand, which may devolve upon the Company on account of this amalgamation," it said in a statement.
Dr. Reddy's Laboratories reported a consolidated net profit of INR 14.14 billion for the December quarter on a consolidated revenue of INR 83.81 billion. Friday, its shares ended at INR 1,109.95 on the National Stock Exchange, down 3.6%. End
Reported by Anand JC
Edited by Akul Nishant Akhoury
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