Dr. Reddy’s Secures Interim Stay on ₹23.95 Billion Tax Demand

Dr Reddy's Laboratories said on Tuesday it has obtained an interim stay from the Telangana High Court on income tax reassessment proceedings for 2020–21. The case relates to the company’s merger with Dr. Reddy's Holdings, a promoter entity.

The Assistant Commissioner of Income Tax had alleged tax evasion, claiming the merger was not reflected in filings, and raised a demand of ₹23.95 billion. Dr Reddy’s challenged the order, arguing the transaction complied with legal and tax provisions.

The merger, approved by the Hyderabad bench of the National Company Law Tribunal in April 2022 with effect from April 2019, included an indemnity clause making promoters liable for any obligations. The company said it expects no material financial impact.