Dr Reddy’s Labs shares tumble over 1% after I-T dept issues order over Rs 2,396 crore tax demand Shares of Dr Reddy’s Laboratories tumbled 1.5% to their day’s low of Rs 1,232.55 on the BSE on Monday after the pharmaceutical major received a tax demand of over Rs 2,395 crore from the Income Tax Department for the assessment year 2020–21. The demand is linked to the merger of Dr Reddy’s Holdings into Dr Reddy’s Laboratories under a scheme of amalgamation.
The company disclosed receiving a show cause notice on April 4, 2025, from the I-T Department. This notice required Dr Reddy’s to demonstrate why its tax returns for the Assessment Year 2020-21 should not be reassessed.
Following the company’s response to this initial notice, the Income Tax Authority issued an Order on May 30, 2025, justifying the demand notice.
Dr Reddy’s has stated that the scheme of amalgamation, which was approved by the National Company Law Tribunal (NCLT) in Hyderabad on April 5, 2022, with an effective date of April 1, 2019, was carried out in adherence to all legal requirements, including tax laws.
The company added that it “strongly believes there has been no escapement of income” due to the amalgamation. It also stated that the development is not expected to have any material impact on its financials, operations, or activities at this stage, and it is currently reviewing the order and taking necessary steps.
“Based on our assessment, there is no material impact on the financials, operations, or other activities of the company at this stage,” it said in a statement.
Source #ET
