YES Bank has secured substantial relief in its ongoing tax dispute, with the Jurisdictional Assessing Officer (JAO) significantly reducing the additional tax demand of ₹292.29 crores for Assessment Year 2017-18. The bank received the rectification order on December 31, 2025, marking a positive development in the case that began earlier in 2025.

Background of Tax Demand Case

The tax dispute originated when the Centralized Processing Center determined an additional tax demand of ₹292.29 crores for Assessment Year 2017-18. YES Bank had initially disclosed this development in April 2025 through a regulatory filing, informing stakeholders about the substantial tax liability.

Following the initial demand, the bank promptly filed a rectification application with the Jurisdictional Assessing Officer in Mumbai to contest the assessment. This proactive approach has now yielded positive results with the recent rectification order.

Rectification Order Details

The key developments from the rectification process are summarized below:

The rectification order represents a significant victory for YES Bank, as the JAO has substantially reduced the additional tax demand. However, the bank has not disclosed the exact quantum of reduction or the remaining balance amount.

Ongoing Proceedings

While the rectification order provides substantial relief, YES Bank continues to pursue relevant proceedings before income tax authorities regarding the balance demand. The bank maintains its position in the ongoing dispute resolution process to address any remaining tax liability.

The regulatory disclosure indicates that the expected financial implications due to compensation or penalty are not applicable given the substantial reduction achieved through the rectification process.

Regulatory Compliance

YES Bank has fulfilled its disclosure obligations under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The information has been made available on the bank's website at www.yes.bank.in in compliance with Regulation 46 of the Listing Regulations.

This development provides relief to YES Bank's financial position and demonstrates the effectiveness of the bank's legal strategy in contesting the initial tax assessment. The substantial reduction in tax demand is expected to have a positive impact on the bank's financial outlook.

Yes Bank has received a substantial income tax refund of approximately ₹345 crores, including interest, following the resolution of a multi-year tax dispute through appellate proceedings. The refund, which exceeds the materiality threshold under amended listing regulations, will have a positive impact on the bank's profit and loss statement.

Tax Dispute Timeline and Resolution

The tax matter originated from an assessment order received by the bank in December 2018 for assessment year 2016-17, wherein certain additions and disallowances were made by the tax authorities. The case subsequently underwent reassessment proceedings, with a reassessment order passed under section 147 in March 2022.

A critical error occurred during the reassessment process when the order considered the income reported in the return of income instead of the assessed income for computing the reassessed income and tax thereon. To rectify this mistake, the Jurisdictional Assessing Officer (JAO) passed a rectification order on April 15, 2025, recomputing the tax demand. The bank had made appropriate stock exchange disclosures regarding this development on April 16, 2025.

Appellate Authority Proceedings

YES Bank had filed appeals against multiple orders before the first level appellate authority, challenging the assessment order, reassessment order, and rectification order. The appellate proceedings culminated in favorable orders for the bank.

On December 31, 2025, the bank received a consolidated Order Giving Effect (OGE) from the JAO, implementing the directions of the appellate authority. The computation statement in this order determined the income tax refund amount.

Financial Impact Details

Regulatory Compliance and Disclosure

The bank has fulfilled its disclosure obligations under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The refund amount to be recognized in the profit and loss statement exceeds the materiality threshold as prescribed under the amended listing regulations.

In compliance with Regulation 46 of the listing regulations, the information has been hosted on the bank's official website at www.yes.bank.in . The disclosure includes comprehensive details of the litigation proceedings, expected financial implications, and quantum of claims as required under regulatory frameworks.

Case Background Summary

The dispute involved complex reassessment proceedings where computational errors in the original reassessment order led to subsequent rectification measures. The bank's persistent appeal efforts through proper legal channels ultimately resulted in this favorable outcome, demonstrating the importance of challenging incorrect tax assessments through appropriate appellate mechanisms.