In a recent exchange filing, Infosys announced that it is set to receive a refund of Rs 6,329 crore from the income tax department. This follows orders received under Section 250 & 254 of the Income Tax Act, 1961 for assessment years 07-08 to 15-16, 17-18 & 18-19. The company anticipates the refund to include interest.
However, amidst this development, Infosys also faces a significant tax liability of Rs 2,763 crore as per assessment orders under Section 143(3) of the Income Tax Act, 1961 for assessment year 22-23, along with a tax demand of INR 4 crores for assessment year 11-12. The company is currently evaluating the implications of these orders on its financial statements for the quarter and year ending March 31, 2024.Additionally, the Bengaluru-based firm disclosed its plans to evaluate filing appeals against these orders and mentioned that its income tax expense includes current and deferred income tax.Furthermore, an Infosys arm is slated to receive refund orders under various sections of the law amounting to Rs 14 crore for assessment years 2007-09 and 2016-17.
In light of these developments, Infosys is scheduled to announce its fourth-quarter results for fiscal 2024 and provide revenue guidance for fiscal 2025 on April 18 after the market close. Despite the potential challenges, Morgan Stanley has reiterated its Overweight rating on Infosys, with a price target of Rs 1750, indicating a 17% upside from its last close of Rs 1498.05 on March 28. The firm cited Infosys’s strong execution and innovative service offerings as the basis for its positive stance but cautioned about risks such as geopolitical tensions, regulatory changes, and currency fluctuations that could impact performance.
These recent proceedings add intricacy to the upcoming financial report and continue to shape the narrative surrounding Infosys in the financial landscape.