The top IT companies are fighting cases related to tax incentives and dividend distribution with tax authorities.
Cognizant, Infosys, Tata Consultancy Services (TCS) and Wipro have around $2 billion pending in tax disputes in India. The IT giants are battling over differences in calculating incentives for their export-oriented units and distribution of dividend taxes to investors, according to an Economic Times report.
Infosys, TCS and Wipro are currently fighting cases related to tax incentives, which they claim under the Software Technology Parks of India (STPI) and Special Economic Zone (SEZ) schemes while Cognizant is in a dispute with authorities on how the dividend distribution tax on profits repatriated to its parent company is calculated, the report said.
TCS alone has over Rs 5,600 crore in disputes pending with tax authorities. The figure nearly doubled since the previous financial year, according to the firm’s latest annual report.
Wipro’s tax dispute stretches over 30 years ago. The company has over Rs 1,900 crore in tax disputes. Infosys has over Rs 3,500 crore in tax disputes, the report added.