Bank of Baroda receives ₹1,068 crore tax demand order from IT Dept; shares extend losses for third day

Shares of Bank of Baroda dropped as much as 1.32% to an intraday low of ₹271.75 apiece on the NSE. The PSU bank stock recovered some the losses to close 1.22% lower at ₹272.05 per share

The stock has dropped 3.01% in the last five sessions while gaining 3.32% in the last one week. Bank of Baroda’s shares have gained 18.15% in the past six months and nearly 46% in the past year.

The slide in stock price was witnessed after the bank informed the stock exchanges, on June 29, that it received a demand notice from the Faceless Assessment Unit of the Income Tax Department, pertaining to the Assessment Year (AY) 2017-18. The bank said that the notice, dated June 28, was for an amount of ₹1,067.82 crore.

Bank of Baroda said that it is in the process of filing an appeal before the Commissioner of Income Tax (appeals), National Faceless Appeal Centre (NFAC). The lender also informed the stock exchanges that it would file a writ petition against the I-T demand notice before the High Court within the prescribed timeline.

The bank believes that it has adequate factual and legal grounds to reasonably substantiate its position in the matter. Bank of Baroda also said that it expects the entire tax demand to subside.

Last week, the public sector lender informed the exchanges that its Board of Directors will meet on July 5 to consider and approve the Capital Plan for FY 2024-25. As part of its fundraising plan, the bank is likely to raise funds through Additional Tier 1 and Tier 2 Debt Capital Instruments with an interchangeability option.