Shares of Zydus Lifesciences were trading almost 2% lower on 27 December after the company announced that its wholly-owned subsidiary Zydus Healthcare Ltd (ZHL) had received a demand notice of Rs 284.58 crore under the Section 143(1) of the Income Tax Act, 1961.

In its regulatory filing, the company said that the Centralised Processing Centre (CPC) of the Income Tax Department has issued an intimation highlighting the apparent errors in the processing of Zydus Healthcare Ltd’s income tax return for the assessment year 2023-24.

The issues identified encompass the disallowance of claims for deduction under Sections 80-IE and 80-JJAA of the Income Tax Act without a basis and a deficiency in crediting taxes deducted or paid. ZHL has challenged these determinations, expressing confidence that, upon rectification, the entire demand will be nullified.

The company added, “ZHL has already disagreed with the demand on the e-filing portal of the Income Tax Department. ZHL is also going to file a Rectification Application under section 154 of the IT Act before the CPC as well as before the Jurisdictional Assessing Officer against the said intimation.”

The pharma major said that with the assessment and advice of the learned counsel, the subsidiary does not expect the intimation to have any material financial impact.

At 1:01 pm, the shares of Zydus Lifesciences were trading 0.71% higher at Rs 681 on NSE.