New Delhi, India — NHPC Limited has disclosed that its subsidiary, NHDC Limited, has received an income tax demand notice totaling ₹231.78 crore (approximately $28 million), even as the parent company strengthened its position in a key hydropower asset.
The tax notice, issued by India’s Income Tax Department, pertains to the Assessment Year 2024–25. The order was passed on March 26, 2026, by the Faceless Assessment Unit, a digital system designed to streamline tax administration.
Details of the Tax Dispute
According to NHPC’s regulatory filing with the Bombay Stock Exchange and the National Stock Exchange of India, the demand includes ₹45.31 crore in interest.
NHDC Limited stated that the tax liability arose due to the assessing officer’s failure to account for Minimum Alternate Tax (MAT) credit amounting to ₹184.37 crore during the computation process.
Company Response: Rectification Underway
NHDC has indicated it will file a rectification application under Section 154 of the Income Tax Act, which allows correction of apparent errors in tax orders.
Key points from the company’s response:
- MAT credit has been consistently allowed in prior assessments
- A formal rectification process is already in progress
- The company expects no material financial or operational impact
NHPC emphasized that the issue is procedural in nature and does not reflect any fundamental tax liability risk.
NHPC Gains Majority Control in Ratle Hydro Project
In a separate announcement, NHPC confirmed that it has increased its stake in Ratle Hydroelectric Power Corporation Limited from 49.72% to 51%, making it a majority-owned subsidiary.
The increase in shareholding follows:
- Release of matching equity contribution by NHPC
- Allotment of additional equity shares
This development strengthens NHPC’s control over the Ratle Hydroelectric Project, a strategically important hydroelectric initiative in India.
Strategic and Industry Implications
The dual developments highlight NHPC’s ongoing efforts to expand its hydropower portfolio while managing regulatory and taxation matters efficiently.
By gaining majority ownership in Ratle Hydroelectric Power Corporation, NHPC reinforces its long-term commitment to renewable and hydroelectric energy, a critical component of India’s clean energy transition.
At the same time, the company’s swift move to address the tax demand underscores its focus on maintaining financial stability and regulatory compliance.
Outlook
As India continues to prioritize sustainable energy, NHPC’s increasing investments in hydropower projects position it as a key player in the country’s renewable energy landscape. The resolution of the tax matter is expected to be procedural, allowing the company to stay focused on its growth and infrastructure expansion plans.