The Income-Tax Department has issued an order that paves way for notice to generic drugmaker Dr. Reddy’s Laboratories over almost ₹2,396-crore tax demand.
The Assistant Commissioner of Income Tax, Circle 8(1), Hyderabad, in a May 30 order, deemed it appropriate to issue a notice under Section 148 of the Income-tax Act, 1961 to assess or reassess the income for assessment year 2020-21, Dr. Reddy’s said in a filing on Saturday.
The order follows a show cause notice in April on why a notice should not be issued for assessment of income “alleged to be escaped from tax consequent to the merger of Dr. Reddy’s Holding into Dr. Reddy’s under a scheme of amalgamation approved by the National Company Law Tribunal (NCLT), Hyderabad on April 5, 2022.
As per the April 4, 2025 notice, the tax demand was quantified at ₹2,395,81,79,470, Dr. Reddy’s said.
The scheme of amalgamation was carried with adherence to all legal requirements, including tax laws, and approved by NCLT, Hyderabad, on April 5, 2022 with effect from the appointed date April 1, 2019.
The company said it strongly believes that there is “no escapement of tax pursuant to the said merger scheme.” Nonetheless, it is reviewing the order/notice and will take actions as required, appropriately, Dr. Reddy’s said.
“Based on our assessment, there is no material impact on the financials, operations, or other activities of the company at this stage,” it said.
Published – May 31, 2025 08:15 pm IST
