Yatharth Hospital contests Rs 68.035 crore tax claims

Yatharth Hospital & Trauma Care Services Limited, referred to as Yatharth Hospital, has appealed tax assessments and interest totalling Rs 68.035 crore for the holding company and two subsidiaries, with no provision made in its September 30, 2026 consolidated results. Management said its internal assessment indicates substantial appellate relief and no significant liability is expected.

What tax claims has Yatharth Hospital received?

Yatharth Hospital received assessment orders during the quarter ended September 30, 2026 from the Deputy Commissioner of Income Tax seeking Rs 68.035 crore in tax and interest across the holding company and two subsidiaries. The orders cover assessment years, or AYs, from AY 2014-15 to AY 2024-25, although the period differs between the three entities.

The holding company received the largest claim, at Rs 40.082 crore. This includes a tax demand of Rs 29.662 crore and interest of Rs 11.42 crore for all opened assessment years from AY 2014-15 to AY 2024-25. The other two claims concern AKS Medical & Research Centre Private Limited and Ramraja Multispeciality Hospital & Trauma Centre Private Limited.

The tax component represents Rs 51.862 crore of the aggregate claim, while interest represents Rs 16.173 crore. The holding company accounts for Rs 40.082 crore, ahead of Ramraja Multispeciality Hospital & Trauma Centre Private Limited at Rs 15.973 crore and AKS Medical & Research Centre Private Limited at Rs 10.98 crore.

Why has Yatharth Hospital not made a provision?

Yatharth Hospital has made no provision because management says it expects substantial relief through appeals and does not expect a significant liability. The holding company and the relevant subsidiaries have filed appeals before the Commissioner of Income Tax, or CIT (Appeals), for the respective assessment years covered by the orders.

The no-provision position applies to the Rs 68.035 crore of combined tax and interest disclosed in the September 30, 2026 financial results. It reflects management's internal assessment of the appeal process, rather than a settlement, withdrawal or cancellation of the assessment orders received during the quarter.

The assessment claims followed Income Tax Department searches in October 2023 under Section 132 of the Income Tax Act at premises belonging to Yatharth Hospital, its subsidiaries and key managerial persons. Yatharth Hospital said it supplied the required information and data to the department during that process.

What happened to Yatharth Hospital's earlier tax attachments?

The Income Tax Department had ordered provisional attachment under Section 281B of the Income Tax Act over certain properties, bank deposits, cash balances and investments in subsidiaries. Yatharth Hospital said that, during the previous year, the department released the provisional attachments on properties and bank deposits.

The September 30, 2026 filing does not say that the assessment orders received in the current quarter led to fresh attachments. It does show that the holding company's disputed years span AY 2014-15 to AY 2024-25, compared with AY 2021-22 to AY 2024-25 for AKS Medical & Research Centre Private Limited and AY 2023-24 to AY 2024-25 for Ramraja Multispeciality Hospital & Trauma Centre Private Limited.

Yatharth Hospital reported net income-tax assets of Rs 32.408 crore at September 30, 2026, compared with Rs 27.189 crore at March 31, 2026. The consolidated balance sheet listed current provisions of Rs 5.039 crore and non-current provisions of Rs 77 lakh, while the filing specifically states that no provision was made for the disputed assessment orders.

How do the claims compare with Yatharth Hospital's results?

The Rs 68.035 crore disputed claim exceeds Yatharth Hospital's consolidated profit after tax of Rs 9.3882 crore for the half year ended September 30, 2026. Profit after tax rose from Rs 8.3293 crore in the half year ended September 30, 2025, while total tax expense increased to Rs 3.2936 crore from Rs 3.0218 crore.

Revenue from operations rose to Rs 82.4074 crore in the six months to September 30, 2026 from Rs 54.2261 crore a year earlier. Profit before tax increased to Rs 12.6818 crore from Rs 11.3511 crore, alongside employee-benefit expense of Rs 16.225 crore versus Rs 10.1963 crore and depreciation and amortisation of Rs 6.1378 crore versus Rs 3.385 crore.

Yatharth Hospital identified medical and healthcare services as its sole operating segment and reported that all operations are within India. Its chief executive officer, acting as chief operating decision maker, reviews performance and allocates resources primarily using revenue from operations, so the filing does not present separate financial performance for individual hospitals or subsidiaries.

What other developments did Yatharth Hospital disclose?

Yatharth Hospital disclosed a definitive agreement with Rasmalai Limited, an affiliate of Advent International, under which Advent International is to hold a 24.9% fully diluted equity stake in Yatharth Hospital. Shareholders approved the proposed transaction at an extraordinary general meeting on October 15, 2026, subject to regulatory approvals and customary precedent conditions.

Yatharth Hospital granted 227,693 employee stock options under its 2024 employee stock option scheme on August 10, 2026. The options carry an exercise price of Rs 10 each, have a vesting period of up to four years and remain subject to specified service conditions.

Cash and cash equivalents stood at Rs 27.5521 crore on September 30, 2026, compared with Rs 22.1099 crore at March 31, 2026. For the half year ended September 30, 2026, operating activities generated Rs 7.3144 crore, investing activities used Rs 17.6515 crore and financing activities generated Rs 15.7792 crore.

Conclusion

Yatharth Hospital is contesting Rs 68.035 crore of tax and interest assessments across the holding company and two subsidiaries, with the holding company accounting for Rs 40.082 crore. The absence of a provision rests on management's stated expectation of substantial appellate relief, while the claims remain subject to proceedings before CIT (Appeals).

The next matter to watch is progress in the appeals, for which Yatharth Hospital did not disclose a hearing date or timetable in its November 3, 2026 results. Investors can also track regulatory approvals and fulfilment of customary conditions for Advent International's proposed 24.9% fully diluted stake following shareholder approval on October 15, 2026.