Tax Tussle on Track: IRCTC Hit with ₹1.85 Crore Demand from Tax Department

The Indian Railway Catering and Tourism Corporation (IRCTC) has received a formal tax demand order totaling ₹18.5 million (₹1.85 crore) from the Income Tax Department. The order, issued on July 2, 2025, pertains to disputed tax liabilities from previous assessment years, though the exact period and nature of the dispute have not been publicly disclosed.

 

IRCTC, which operates railway ticketing, catering, and tourism services, is currently reviewing the order and is expected to file a response or appeal after consulting with its legal and tax advisors. The company has not yet made any provisioning for the demand in its financial statements, indicating that it may contest the claim.

 

Key Highlights:

 

Tax Demand: ₹18.5 million raised by the Income Tax Department.

Nature of Dispute: Likely linked to past assessments; specifics under review.

Company Response: IRCTC evaluating legal options; no immediate financial provisioning.

Financial Health: IRCTC reported a Q4 FY25 net profit of ₹358 crore, up 26% YoY, with strong revenue from internet ticketing and tourism.

Market Impact: Shares remained stable post-announcement, reflecting limited investor concern.

 

This development comes amid heightened scrutiny of public sector undertakings and digital service providers, especially those with monopoly positions like IRCTC. The outcome of this case could set a precedent for similar tax interpretations in the sector.

 

Sources: Reuters, Moneycontrol, CNBC-TV18