Date:01/03/2006 URL: http://www.thehindubusinessline.com/2006/03/01/stories/2006030100640800.htm

Back IDFC adversely affected

The removal of Section 10 23(G) of the Income Tax Act could adversely impact the profitability of Infrastructure Development Finance Corporation (IDFC). A substantial proportion of income received in the form of interest and dividends by IDFC was so far eligible for relief under this Section. This was why tax incidence, including deferred tax was a mere 6 per cent for IDFC, while it was more than 20 per cent for other banks, such as State Bank of India, ICICI Bank and Punjab National Bank. The impact on return on assets, and consequently the valuation, of IDFC could be severe.