Indian Overseas Bank has received a significant tax demand notice from income tax authorities, marking a major regulatory development for the public sector lender. The bank disclosed this information to stock exchanges under SEBI regulations on 03.03.2026.

Tax Demand Details

The bank received a Notice of Demand under Section 156 of the Income Tax Act, 1961, from the office of the Deputy Commissioner of Income-tax, Non-Corporate Circle-8, Chennai-600034. The notice pertains to Assessment Year 2015-16 and follows an order from the Income Tax Appellate Tribunal (ITAT).

Nature of Disallowances

The demand notice stems from re-computation of income and disallowances made with regard to claims made in the income tax returns for AY 2015-16. The tax authorities have identified aberrations and non-compliances in the bank's tax filings, leading to additions and disallowances in the assessment.

The order also mentions that penalty under Section 271(1)(c) of the Income Tax Act may be imposed separately, which could potentially increase the financial implications for the bank.

Bank's Response Strategy

Indian Overseas Bank has outlined its approach to challenge the tax demand:

• Filing an appeal before the appropriate forum against disallowances and additions
• Challenging the order within prescribed timelines
• Leveraging precedence and orders of appellate authorities
• Utilizing factual and legal grounds to substantiate its position

Financial Impact Assessment

Despite the substantial demand amount, the bank has expressed confidence in its legal position. According to the disclosure, Indian Overseas Bank believes it has adequate factual and legal grounds to reasonably substantiate its position in the matter. The bank expects that considering the expected relief, the entire demand will subside.

Regulatory Compliance

The disclosure was made pursuant to Regulation 30 read with Schedule III of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The bank has fulfilled its obligation to inform investors about material developments that could potentially impact its operations.

The communication was signed by Raghuram Mallela, Deputy General Manager/Company Secretary & Compliance Officer, ensuring proper authorization and compliance with regulatory requirements. The bank has requested stock exchanges to take the disclosure on record and arrange for dissemination to market participants.

Indian Overseas Bank has announced the fixation of record dates for coupon payments on its Basel III Tier II Bonds Series IV and Series V. The bank informed stock exchanges that coupon payments on these bonds are due in March 2026, and it will make payments on the respective due dates. The announcement was made through a communication dated 27.02.2026 to both BSE Limited and National Stock Exchange of India Limited.

Bond Details and Coupon Rates

The bank has fixed record dates for two series of Basel III Tier II Bonds with different coupon rates and payment schedules. The bonds carry attractive coupon rates reflecting the bank's capital structure requirements under Basel III norms.

Record Date Adjustments

The bank has made necessary adjustments to the record dates to account for non-business days. Since the original record dates fall on non-business days, the next business date has been fixed as the record date in accordance with the respective term sheets of the bonds. This ensures smooth processing of coupon payments to eligible bondholders.

Regulatory Compliance

The announcement has been made pursuant to Regulation 60 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. This regulation mandates listed companies to inform stock exchanges about record dates for various corporate actions, including coupon payments on bonds. The communication was signed by Ram Mohan K, Deputy Company Secretary of Indian Overseas Bank.

Payment Schedule

Bondholders whose names appear in the records on the respective record dates will be eligible to receive the coupon payments. Series V bondholders will receive their coupon payment earlier, with a record date of 09.03.2026 and payment date of 24.03.2026. Series IV bondholders will receive their payments later in the month, with a record date of 16.03.2026 and payment date of 31.03.2026. The higher coupon rate of 9.00% for Series V bonds compared to 8.60% for Series IV reflects the different terms and conditions of these bond issuances.