Divi's Lab Receives Draft Tax Assessment Order Proposing ₹570.51 Crore Additions For FY23
Divi's Laboratories has received a draft assessment order from Income Tax Authority proposing substantial tax additions of ₹570.51 crores for FY2022-23, primarily concerning transfer pricing adjustments on domestic transactions and corporate tax matters. The company disclosed this development through regulatory filing and expressed intention to challenge the proposed adjustments through appropriate appeals process.
*this image is generated using AI for illustrative purposes only.
Divi's Laboratories Limited has received a draft assessment order from the Income Tax Authority proposing substantial tax additions for the financial year 2022-23. The pharmaceutical company disclosed this development through a regulatory filing dated March 21, 2026, in compliance with SEBI listing regulations.
Draft Assessment Order Details
The draft order, issued under Section 144C(1) of the Income Tax Act, 1961, was dated March 20, 2026, and received by the company on March 21, 2026. The communication originated from the Assistant Commissioner of Income Tax, Central Circle-2(1), Hyderabad.
| Parameter: | Details |
|---|---|
| Assessment Period: | FY2022-23 (Assessment Year 2023-24) |
| Proposed Additions: | ₹570.51 crores |
| Primary Issues: | Transfer Pricing adjustments and Corporate tax adjustments |
| Authority: | Assistant Commissioner of Income Tax, Central Circle-2(1), Hyderabad |
Nature of Proposed Adjustments
The draft assessment order proposes additions and disallowances amounting to ₹570.51 crores with respect to the company's returned income. The proposed adjustments primarily stem from:
- Transfer pricing adjustments on specified domestic transactions
- Corporate tax adjustments
These adjustments would result in additional income tax liability on the upward adjustment in income as specified in the draft order.
Penalty Implications
According to the draft order, penalty proceedings under Section 270A of the Income Tax Act, 1961, will be initiated separately for alleged under-reporting of income in respect of the proposed additions. This could potentially result in additional financial implications beyond the primary tax liability.
Company's Response Strategy
Divi's Laboratories has indicated that it is currently evaluating the draft assessment order in detail. The company has expressed its intention to file an appeal against the proposed adjustments with the appropriate authority within the stipulated timeframe. This approach suggests the company disagrees with the tax authority's assessment and believes it has grounds to challenge the proposed additions.
Regulatory Compliance
The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, specifically under sub-para 8 of Para B of Part A Schedule III. This regulatory requirement ensures transparency regarding material developments that could impact the company's financial position and investor interests.
Historical Stock Returns for Divis Laboratories
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.19% | -1.18% | -3.85% | +0.51% | +1.76% | +72.77% |
How might this ₹570.51 crore tax dispute impact Divi's Laboratories' cash flow and capital allocation plans for upcoming quarters?
What precedent could this transfer pricing case set for other pharmaceutical companies with similar domestic transaction structures?
Will this tax assessment prompt Divi's Laboratories to restructure its transfer pricing policies or domestic transaction frameworks?
16
Create Custom Screeners 
Access 200+ Pre-built Filters 
Use 50+ Readymade Screener 
