Fortis Healthcare: ₹89.53 Crore Tax Demand Scrapped as Rectification Order Arrives

Fortis Healthcare Ltd shares are trading with an uptick of 1.25% at ₹689.50, this comes after the shares closed Monday's trading session on a flat note. In the current market, the stock has managed to hold its ground as the healthcare major announced the complete withdrawal of a substantial tax demand previously levied against one of its key subsidiaries.

Original Demand Against Subsidiary

Fortis Hospitals Ltd, a material subsidiary of Fortis Healthcare, has received a tax demand of ₹89.53 crore from the Income Tax Department for Assessment Year 2022–23. The demand, raised under Section 143(3) of the Income Tax Act, 1961, was issued on March 21, 2024, and includes ₹9.54 crore in interest. Fortis Healthcare had disclosed the development to stock exchanges on March 22, 2024, highlighting the significance of the liability.

Rectification Leads to Demand Withdrawal

Fortis Healthcare has announced that it received a rectification order from the Income Tax Department, effectively nullifying a previous tax demand of ₹89.53 crore raised against its subsidiary, Fortis Hospitals Ltd, for Assessment Year 2022–23. The revised order, issued under Section 154 read with Section 143(3) of the Income Tax Act, 1961, corrected errors in the earlier assessment. The rectification order was received on May 5 at 3:19 p.m., and with the demand now reduced to nil, the company confirmed that no outstanding liability remains for the assessment period, bringing the tax matter to a formal close.

Despite the clear positive outcome of the tax dispute resolution, the share price reaction on Monday was rather muted, with the stock ending only marginally lower. But at present, the share price is reflecting a positive sentiment in a weak broader market.

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