IIFL Finance, subsidiary face combined Rs 963 crore tax demand

The Income Tax Department has served substantial tax demand notices on IIFL Finance and its subsidiary Home Finance, totalling Rs 963 crore, officials familiar with the matter said. The demand orders were issued by the Assistant Commissioner of Income Tax, Central Circle - 4(4), based in Mumbai, following search and seizure actions conducted under Section 158BC(1)(c) of the Income Tax Act.

Search and seizure operations represent a significant enforcement action by tax authorities and typically precede detailed scrutiny of financial records and tax compliance. The issuance of tax demands following such operations is standard procedure when authorities identify alleged discrepancies or unpaid tax liabilities.

The notices mark the latest regulatory action against entities within the IIFL group, which operates across lending, insurance and financial services sectors. Home Finance, as a subsidiary, falls under the same corporate structure and compliance framework as its parent entity.

It was not immediately clear whether the companies plan to contest the tax demands through the appellate process or take other remedial steps. Both entities are likely to evaluate their options under income tax law, which provides avenues for disputing assessments and demand notices issued by tax authorities.

The development adds to the scrutiny that non-banking financial companies have faced from regulators and tax authorities in recent years. The financial services sector remains under close watch from multiple government agencies monitoring compliance and financial practices.