Infosys Technologies has been slapped with a tax notice of Rs 50 crore (Rs 500 million) by the Indian income tax authorities for the financial year 2001-02.
The tax notice to pay up comes after Infosys was not allowed certain exemptions under the Income Tax Act which it had applied for.
In its filing to the Securities and Exchange Commission of the United States, Infosys has disclosed that additional tax, including an interest of Rs 15 crore (Rs 150 million), was levied by the income tax department April 15 after the company completed its tax review.
"We intend to contest the demand. The management and tax advisors believe the company's position will be upheld in the appellate process," Infosys said in its filing to the SEC.
The income tax department did not grant tax exemptions to the company under section 10A of the Income Tax Act for expenses incurred in foreign currency.
"The management believes the ultimate outcome of this proceeding will not have a material adverse effect on the financial position and results of operations," the company said in its filing.
Another Bangalore-based software heavyweight, Wipro was similarly asked to pay an additional Rs 262 crore (Rs 2.62 billion) as income tax dues for the year ended March 2002.