Bank of Baroda has been issued a demand order by the Faceless Assessment Unit of the Income Tax Department, amounting to ₹806.18 crore. This demand pertains to the assessment year 2020-21 and was received by the bank on 30 March 2026.
The demand order was issued under section 156 of the Income Tax Act, 1961. The primary issues cited in the order involve the taxability of income from foreign branches, interest paid on the purchase of securities during broken periods, and bad debts written off under section 36(1)(vii) of the Income Tax Act.
Despite the substantial amount involved, Bank of Baroda has stated that there is no immediate impact on its financial operations or other activities. The bank is in the process of filing an appeal against this order with the Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre, or potentially a writ petition before the Hon’ble High Court, depending on what is deemed appropriate.
The bank is confident that it has strong factual and legal grounds to contest the demand. It expects that the entire demand will eventually be nullified based on precedents and orders from appellate authorities.
Disclaimer: This article is based on a regulatory filing submitted to the National Stock Exchange of India (NSE).