Bank of Baroda Faces Rs 1067.82 Crore Income Tax Demand for AY 2017-18

Bank of Baroda to Appeal Rs 1,067.82 Crore Tax Demand

State-owned Bank of Baroda has disclosed in a regulatory filing that it has received a demand order of Rs 1,067.82 crore under Section 156 of the Income Tax Act, 1961, for the assessment year 2017-18. The bank is preparing to challenge the order.

Appeal Process Underway

In the filing, Bank of Baroda stated, "The Bank is under the process of filing an appeal before the Commissioner of Income Tax (appeals), National Faceless Appeal Centre (NFAC)/ writ petition before Honourable High Court (as may deem fit) against the said order within the prescribed timelines. Looking to the precedence/ orders of appellate Authorities, the Bank believes that it has adequate factual and legal grounds to reasonably substantiate its position in the matter. Accordingly, the Bank expects the entire demand to subside. As such, there is no impact on financial operations or other activities of the bank."

Financial Performance Highlights

Amid the tax dispute, Bank of Baroda reported robust financial results for the January-March quarter of the financial year 2023-24. The bank's net profit rose to Rs 4,886 crore, a 2.3 percent increase compared to Rs 4,775 crore in the same quarter the previous year.

• Gross NPA Reduction: The bank’s gross non-performing asset (NPA) ratio improved to 2.92 percent, down from 3.79 percent in the corresponding quarter last year.
• Net NPA Decline: The net NPA for the quarter stood at 0.68 percent, compared to 0.89 percent a year ago.
• Net Interest Income: The bank's net interest income for the quarter increased to Rs 11,793 crore from Rs 11,525 crore in the previous year.
• Net Interest Margin: The net interest margin fell slightly to 3.18 percent from 3.31 percent last year.

Growth in Deposits and Advances

Bank of Baroda also reported growth in both domestic deposits and advances. Total domestic deposits increased by 7.7 percent year-on-year, reaching Rs 11.28 lakh crore, up from Rs 10.47 lakh crore. Domestic advances grew by 12.9 percent, rising from Rs 7.95 lakh crore in Q4FY23 to Rs 8.98 lakh crore in Q4FY24.