Fusion Finance , a prominent player in the financial sector, is currently embroiled in a significant tax dispute with the Income Tax Department. The company has received intimations regarding two income tax appeals filed by the Income Tax Officer (ITO) with the Income Tax Appellate Tribunal (ITAT) in New Delhi. These appeals challenge previous orders that had deleted tax demands totaling Rs 27.8 crore across two assessment years.

Breakdown of Disputed Tax Demands

The disputed tax demands for Fusion Finance are as follows:

Nature of the Dispute

The core of the dispute revolves around the alleged non-deduction or lower deduction of tax on interest payments made to foreign Non-Convertible Debenture (NCD) holders. The tax authority contends that:

1. Fusion Finance should be treated as 'deemed to be an assessee in default'.
2. The interest payments should attract a 20% withholding tax (plus cess and surcharge) under section 196D read with section 115AD of the Income Tax Act.
3. This is in contrast to the 5% (plus cess and surcharge) already withheld by the company under section 194LD of the Act.

Previous Proceedings and Current Status

1. Fusion Finance had successfully appealed against earlier orders, resulting in the deletion of the tax demands.
2. The Income Tax Officer has now challenged these favorable decisions before the tribunal.
3. The company received intimations of these appeals on October 16, 2025, as disclosed in their latest LODR (Listing Obligations and Disclosure Requirements) filings.

Potential Impact

While the outcome of these appeals remains uncertain, the disputed amount of Rs 27.8 crore represents a significant financial consideration for Fusion Finance. The resolution of this case could have implications not only for the company but potentially for other firms in the financial sector dealing with similar tax issues related to foreign NCD holders.

As the case progresses through the Income Tax Appellate Tribunal, investors and industry observers will be keenly watching for the final verdict and its potential ramifications on Fusion Finance's financial position and the broader interpretation of tax laws for similar financial instruments.

Fusion Finance Limited, a prominent player in the financial services sector, has announced significant changes to its top leadership. The company's Board of Directors has approved the appointment of Sanjay Garyali as the new Managing Director & Chief Executive Officer, effective September 30, 2025. This move comes as Devesh Sachdev steps down from his position as Managing Director due to personal reasons.

Leadership Transition

Sanjay Garyali, who has been serving as the company's CEO since March 2025, brings over 28 years of experience in the finance industry to his new role. Prior to joining Fusion Finance, Garyali led the Urban Finance business at L&T Finance, where he successfully managed a portfolio worth INR 40,000.00 crore, encompassing Two-Wheeler, Consumer Loans, and Mortgages.

Garyali's appointment is part of Fusion Finance's strategy to strengthen its executive leadership team and prepare for the next phase of growth. His expertise in retail financial markets and deep understanding of key industry drivers are expected to be valuable assets for the company.

Devesh Sachdev's Continued Involvement

While stepping down from the Managing Director position, Devesh Sachdev will continue to serve as a director on the company's Board. The Board has expressed its deep appreciation for Sachdev's visionary leadership and invaluable contribution in building and growing Fusion Finance since its inception as a founder.

Additional Appointment

In a move to further strengthen its governance structure, Fusion Finance has also appointed Gautam Munjal as the Head of Internal Audit, effective September 30, 2025. Munjal brings over 26 years of experience across leading financial institutions in the BFSI sector, with expertise in Risk Based Internal Audit, Risk Management, Operations, Customer Experience, and Technology-driven business processes.

Executive Profiles

Sanjay Garyali

• Over 28 years of experience in the finance industry
• Previously led the Urban Finance business at L&T Finance
• Managed a portfolio worth INR 40,000.00 crore
• Expertise in shaping policies, developing infrastructure, and creating distribution networks
• Spearheaded the development of a 5th generation credit engine
• Holds an MBA from Panjab University and a Bachelor of Engineering from BV College of Engineering Pune

Gautam Munjal

• Over 26 years of experience in the BFSI sector
• Held senior leadership roles at Hero Housing Finance Ltd., PNB Housing Finance Ltd., and other major financial institutions
• Expertise in Risk Based Internal Audit, Risk Management, and Technology-driven business processes
• Holds a master's degree in finance from Punjab University
• Advanced certifications including Strategic Business Management from Harvard University and Leadership Development from IIM Calcutta

These leadership changes mark a significant milestone for Fusion Finance as it positions itself for future growth and enhanced governance in the competitive financial services landscape.