Mphasis Receives ₹232.37 Crore Tax Demand from Income Tax Department

IT services firm Mphasis has been issued a tax demand totalling ₹232.37 crore by the Income Tax Department for the financial years 2018–19 and 2019–20. The company has stated that it will challenge the order and expects no significant financial impact.

Tax Demand Linked to Foreign Payments

As per a regulatory filing by the company, the notice was received on March 29, 2025. The tax demand was raised following a review of payments made by Mphasis to its foreign subsidiaries and associated enterprises. The department claims that the company should have deducted tax at source (TDS) on these payments.

Mphasis clarified that no penalties or operational restrictions have been imposed. The company also noted a short delay in disclosing the notice, citing that it was received late on a Saturday and subsequently reported on the next working day, March 31, 2025, as reported by CNBC TV18.

Company’s Response and Legal Plan

Mphasis is currently evaluating its legal options and plans to appeal the tax demand. The company maintained that the matter is not expected to materially affect its financial health.

Cybersecurity Partnership with SecPod

Separately, Mphasis has entered into a partnership with cybersecurity firm SecPod to bolster its enterprise security offerings. As part of the agreement, Mphasis will integrate SecPod’s SanerNow Continuous Vulnerability and Exposure Management (CVEM) platform into its services as reported by TechCircle.

Conclusion

While Mphasis navigates the tax dispute raised by the Income Tax Department, it continues to focus on strengthening its service capabilities through new technology partnerships. The company remains confident in its legal position and is taking steps to address the issue without significant disruption to its operations.

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