3i Infotech settles ₹798 crore tax disputes in 2026

The disclosure and why it matters

3i Infotech has moved to close multiple long-running income-tax litigations by opting for the Direct Tax Vivad Se Vishwas Scheme, 2024. The company said it received Certificate in Form 2 from the Principal Commissioner of Income Tax, Designated Authority, Mumbai, covering assessment years (AY) 2012-13 through AY 2018-19. The settlement relates to disputed tax additions and disallowances across these years.

The key accounting impact disclosed by the company is a reduction in its accumulated brought forward losses. 3i Infotech quantified this reduction at ₹79,838 lakh, which is ₹798.38 crore. The company also stated that the settlement does not involve any incremental cash outflow and does not have a material impact on operations.

What 3i Infotech settled under Vivad Se Vishwas 2024

The company’s disclosures indicate that the settlement covers income-tax litigations for AY 2012-13 to AY 2018-19 under the Vivad Se Vishwas framework. The Income Tax portal reflected the settlement details as of May 27, 2026, according to the update.

Under the scheme process described in the disclosures, Form 2 certificates were issued after the designated authority accepted the application. 3i Infotech added that it was awaiting the final order in Form 4 to formally conclude the process for the set of assessment years covered by the Form 2 certificates.

Impact on carried-forward losses, not cash flow

A central point in the company’s communication is that the settlement reduces accumulated brought forward losses by ₹79,838 lakh (₹798.38 crore). This amount represents the disputed additions and disallowances for the relevant periods.

At the same time, 3i Infotech clarified that there is no incremental cash outflow linked to this settlement. It also stated there is no material impact on its operations. This distinction matters for investors because it separates an accounting change in carried-forward losses from any near-term liquidity impact.

Subsidiary update: final Form 4 order for FY 2013-14

Separately, 3i Infotech said its material subsidiary, 3i Infotech Digital BPS Limited, received a final settlement order in Form 4 for financial year 2013-14. The order was issued by CIT TDS 2, Delhi, dated March 23, 2026.

The company said the Form 4 order confirms the status of the revised Form 2 issued earlier on November 26, 2025. This marked completion of the tax settlement process for that subsidiary and that year, based on the information provided.

Revised Form 2 for the subsidiary changed the expected refund

In another related disclosure, 3i Infotech stated that 3i Infotech Digital BPS Limited received a revised Certificate in Form 2 from CIT TDS 2, Delhi, under the scheme for FY 2013-14. The revision changed the expected net cash inflow towards a balance refund.

The expected net cash inflow was reduced from ₹74.79 lakh to ₹28.24 lakh. The company stated that this revision had no material impact on the subsidiary’s operations or activities.

Additional tax outcomes: CIT(A) relief on transfer pricing adjustment

Beyond the scheme settlement, 3i Infotech disclosed a favourable appellate order for AY 2013-14. The company said it received an order from the Commissioner of Income Tax (Appeals) dated July 30, 2026, allowing its appeal.

According to the disclosure, the CIT(A) deleted a transfer pricing adjustment of ₹34.38 crore. The adjustment had been made under Section 143(3) and Section 263 of the Income-tax Act, 1961. The company said there was no tax or cash flow impact from this deletion because the matter was not treated as a contingent liability due to sufficient carried forward tax losses.

ITAT decision removed a penalty demand for AY 2013-14

3i Infotech also said it received a favourable ruling from the Income Tax Appellate Tribunal (ITAT) deleting a penalty of ₹14.14 crore. The penalty was levied for AY 2013-14 under Section 271G of the Income Tax Act, 1961.

The company stated that this decision reduced its outstanding tax demand to nil for that particular assessment issue, providing complete relief from that demand.

Key facts at a glance

The company’s multiple disclosures point to a broader clean-up of tax-related uncertainties through both the settlement scheme route and appellate relief. The Vivad Se Vishwas settlement for AY 2012-13 to AY 2018-19 is framed as an accounting impact on accumulated losses, while other outcomes relate to specific adjustments and penalties for AY 2013-14.

Market impact and what investors typically track

The disclosures emphasise that operations and cash flows are unaffected by the AY 2012-13 to AY 2018-19 settlement, because the company does not expect any incremental cash outflow. For shareholders, the immediate relevance lies in the reduction of accumulated brought forward losses and the closure of litigations through the scheme process.

For the subsidiary, the key cash-related update is the revised expected refund amount for FY 2013-14, with the expected net inflow reduced to ₹28.24 lakh. The final Form 4 order for FY 2013-14 signals completion of that settlement process, as per the company’s statement.

Conclusion

3i Infotech’s updates show a mix of settlements under Vivad Se Vishwas 2024 and favourable appellate outcomes for AY 2013-14. The company has pegged the scheme-linked resolution for AY 2012-13 to AY 2018-19 at ₹798.38 crore, translating into a reduction in accumulated brought forward losses without incremental cash outflow. For process completion, the company indicated it was awaiting the final Form 4 order for the wider set of assessment years covered under the Form 2 certificates, while the subsidiary has already received Form 4 for FY 2013-14.