Bank of Baroda slapped with ₹1,068 cr tax order; share dips

Bank of Baroda received (BoB) an income tax order worth ₹1,067.82 crore from the commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), the bank says in a BSE filing. The state-owned bank received a demand order under section 156 of the Income Tax Act, 1961, for the assessment year 2017-18.

Following the receipt of the tax order, at 11:02 AM shares of the state-owned Bank of Baroda dipped marginally by 0.25% to ₹274.65 apiece on the BSE today.

The bank indicated that it is in the process of appealing the order by filing before the commissioner of Income Tax (Appeals), the National Faceless Appeal Centre (NFAC), or potentially a writ petition before the Honourable High Court, as deemed appropriate, within the required timelines. Consequently, the bank expects the entire demand to be dismissed.

The bank states, "Looking to the precedence/ orders of appellate Authorities, the bank believes that it has adequate factual and legal grounds to reasonably substantiate its position in the matter. Accordingly, the Bank expects the entire demand to subside. As such, there is no impact on financial operations or other activities of the bank."

The development comes after in May, the Reserve Bank of India (RBI) lifted the restrictions on BoB’s mobile application, BoB World, and allowed the PSU bank to resume onboarding new customers via its mobile app.

BoB's Q4 FY24 profit stood at ₹4,886 crore, a 2.3% increase compared to the ₹4,775 crore profit in the same period the previous year. The bank's gross non-performing asset (NPA) ratio declined to 2.92% from 3.79% in the corresponding quarter last year, while the net NPA ratio dropped to 0.68% from 0.89%. The lender's net interest income for the quarter rose to ₹11,793 crore from ₹11,525 crore a year ago, though the net interest margin decreased to 3.18% from 3.31%. Total domestic deposits grew by 7.7% year-on-year to ₹11.28 lakh crore from ₹10.47 lakh crore, and domestic advances increased by 12.9% from ₹7.95 lakh crore in Q4FY23 to ₹8.98 lakh crore in Q4FY24.