Max Group subsidiary Faces Rs. 21.13 Lakh Income Tax Demand Over Interest Income from Project Funds

Max Estates Limited, a subsidiary company of the company, has informed the SEBI (Securities and Exchange Board of India) that its secondary, Max Square Limited, has received an income tax order dated June 5, 2025, from the National Faceless Appeal Centre (NFAC), Income Tax Department, Government of India. The order relates to the taxation of interest income earned on fixed deposits placed during the development of a project.

The issue is regarding the fact that Max Square has earned some money by putting its unused project in fixed deposits. The company believes the interest should not be treated as a part of income; the tax authorities considered it as revenue income and hence treated it as taxable. The Income Tax Department treats fixed deposit interest as taxable income for AY 2021–22.

In reference to the decision of the National Faceless Appeal Centre (NFAC), under Section 250 of the Income Tax Act, 1961, an amount of Rs. 63,77,502 (interest cost) has been included in the total income of the company under the head “Income from Other Sources,” which has resulted in an applicable tax demand of Rs. 21,13,490 for Assessment Year 2021–22.

Max Estates clarified that the financial impact of this order is not material at the consolidated level and it does not affect the company’s operations. The subsidiary is currently considering legal options, including filing an appeal before higher authorities.

The company disclosed the development under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and assured stakeholders that all necessary actions are being taken.