IIFL Finance & Subsidiary Receive Tax Demands

Reporting Period: Not Applicable (Tax matter)

Nature of Filing / Announcement: Disclosure under Regulation 30 of SEBI Listing Regulations regarding tax demands

Received assessment order dated August 24, 2026 from Assistant Commissioner of Income Tax, Central Circle – 4(4), Mumbai
Tax demand raised under section 158BC(1)(c) of Income Tax Act, 1961
Assessment covers block period: April 1, 2018 to February 3, 2025
Total demand: ₹963.39 crore (including surcharge and cess)
Principal additions/disallowances include:
Overriding commission (ORC) income: approximately ₹490 crore
Deduction under section 36(1)(viii): approximately ₹305 crore
Interest strip assets: approximately ₹392 crore
ESOP expenses: approximately ₹53 crore

Received stay order dated August 5, 2026 on tax demand of ₹475.56 crore (originally disclosed May 12, 2026)
Stay granted until December 31, 2026 or disposal of appeal, whichever is earlier
Stay subject to payment of ₹23.78 crore (5% of disputed demand) in installments up to December 15, 2026
First installment of ₹5 crore paid on August 13, 2026
Company must comply with other conditions specified in the stay order

Believes it has substantial factual and legal grounds to contest additions/disallowances
ORC and interest strip assets income already offered to tax
Section 36(1)(viii) issue concerns interpretation of "general reserves" for statutory limits
ESOP expenses treatment contrary to legal position relied upon by company
Several matters examined in earlier scrutiny assessments
Pursuing appellate, rectification and other legal remedies
Does not expect material impact on financial position or operations