Mastek Receives Rs 123.58 Crore Tax Addition Order, To Challenge Assessment

Mastek Limited has informed stock exchanges that it received a final assessment order from the Income Tax Department for the financial year 2022-23. The order includes a transfer pricing adjustment of Rs. 90,95,38,080 and an additional income tax adjustment under domestic tax laws of Rs. 32,62,88,114, taking the total disputed addition to Rs. 1,23,58,26,194. The tax department has also initiated penalty proceedings under Section 270A of the Income Tax Act.

The company received the assessment order on May 30, 2026. However, the disclosure to stock exchanges was made later because the order was received over the weekend. Mastek said it needed time to carefully review and verify the contents of the order and assess its implications before making a public announcement. The company stated that the disclosure was made immediately after completing its internal review.

According to the assessment order, tax authorities have proposed transfer pricing adjustments of Rs. 90,95,38,080 under Section 92CA(3) of the Income Tax Act and added Rs. 32,62,88,114 to the company’s taxable income under domestic tax provisions.

Mastek said it currently does not expect any material financial impact from the order. The company noted that the computation sheet attached to the assessment order contains apparent errors, including the application of a higher tax rate, non-consideration of foreign tax credits, and failure to grant credit for advance tax paid by a subsidiary that was later merged with the company.

The company plans to challenge the assessment and file objections before the appropriate tax appellate authorities within the prescribed timelines. Based on its preliminary review, Mastek believes the order will not have any impact on its financial position, operations, or business activities.