The Income Tax department’s Intelligence and Criminal Investigation team has conducted a ‘spot verification’ at the Tamilnad Mercantile Bank’s head office in Thoothukudi. The bank, which was founded over a century ago, stated that its business operations were unaffected, and it was fully cooperating with the officials involved in the verification.
According to the bank, the verification was being conducted to ensure statutory compliances under section 285BA of the Income Tax Act, 1961. It reaffirmed its commitment to complying with legal obligations for disclosure and providing clarifications and details sought by Income Tax officials.
Tamilnad Mercantile Bank’s net profit increased by 11.45 percent to INR 253 crore for the fourth quarter ending March 31, 2023. Its bad loans declined, helping the bank’s performance, although its total income increased only slightly to INR 1,204 crore from the previous year’s INR 1,200 crore.
This spot verification may have a ripple effect on the Indian banking industry, where compliance with tax regulations is a crucial issue. The Income Tax department may conduct similar audits of other banks, which could lead to changes in the way banks do business across India.
Overall, Tamilnad Mercantile Bank’s business continued without any interruption, indicating the bank’s efficiency and professionalism in dealing with the regulatory body. Such spot verification exercises are routine, and have an essential role in ensuring that businesses comply with statutory obligations.
