IOB Gets ₹766 Crore Income Tax Demand Notice, Bank to Move Appellate Authority

Chennai, March 3, 2026: Indian Overseas Bank (IOB) has been served with a massive income tax demand of over ₹766 crore relating to the assessment year 2015-16, according to a regulatory filing by the public sector lender on Tuesday.

The notice, issued under Section 156 of the Income Tax Act, 1961, was received by the bank on March 2 from the office of the Deputy Commissioner of Income-tax, Non-Corporate Circle-8, Chennai. The demand follows an order passed by the Income Tax Appellate Tribunal (ITAT) on December 31, 2024.

In its communication to the stock exchanges, IOB disclosed that the demand arises from disallowances and re-computation of income made by the tax authorities for the financial year 2014-15.

However, the bank has expressed confidence in its legal position and confirmed that it will challenge the order.

"The Bank is in the process of filing an appeal before the appropriate forum against the disallowances/additions made in the said order within the prescribed timelines," IOB stated in the filing.

The lender further emphasized that based on past precedents and orders of appellate authorities, it believes it has strong factual and legal grounds to defend its position.

"Considering the expected relief, the Bank expects that the entire demand will subside. As such, no impact is expected on financial, operations or other activities of the Bank," the filing added.

The notice also mentions that penalty proceedings under Section 271(1)(c) of the Income Tax Act may be initiated separately, though no immediate penalty has been imposed.

The disclosure was made in compliance with SEBI's Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015, which mandate listed entities to inform exchanges about any material communication from statutory authorities.

Indian Overseas Bank, headquartered in Chennai, is one of the country's prominent public sector banks with a pan-India presence.