IT authorities issue orders to Fusion Microfinance and direct payment of ₹27.80 cr

Fusion Microfinance said the Income Tax (IT) authorities have issued two orders directing them to make payments totaling ₹27.80 crore, including interest.

The I-T authorities passed the two orders (one for ₹16.62 crore and another for ₹11.18 crore) under Section 201 of the Income Tax Act, 1961 for AY (assessment year) 2020-21, the microfinance institution in an exchange application.

The company said the purported orders under Section 201 of the Act relate to non-deduction/lower deduction of tax on interest payments to foreign holders of NCDs (non-convertible debentures), and these have been treated as ‘deemed as a taxpayer’. in default.”

“It has been submitted that interest payment will attract tax deduction of 20 percent plus tax and surcharge under 196D read with section 115AD of the Act in lieu of tax already deducted at 5% plus tax and surcharge under section 194LD of the Act.” according to the filing.

Fusion Microfinance said it will challenge the orders of the adjudicating authority by appealing to the competent authority.

The Company believes that it has sufficient legal grounds to reasonably substantiate its position on this matter and does not expect any material impact on the Company’s financial, operational or other activities as a result of the said orders.

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