IBM’s Indian unit has been asked by Indian tax authorities to pay approximately $866m in outstanding tax for alleged suppression of revenues generated during FY2009.
The Indian tax authorities have reportedly sent a notice to the local unit of the US software firm for under-reporting revenue during the period.
An IBM India spokeswoman was cited by the Business Standard newspaper as saying: "IBM does not agree with the tax department’s claims and will aggressively defend itself through the appropriate judicial process."
The US firm said in its 10-Q filed with the US Securities and Exchange Commission (SEC) that it had reportedly recorded $394m in prepaid income tax in India.
According to the filing, IBM had also paid the majority of the amount to hold back its right to demand earlier tax assessments in the country, which it anticipates to succeed in appeal.
IBM is the latest firm in India hit with tax blow as the country is pursuing outstanding tax claims against several firms including Royal Dutch Shell and Vodafone among several others.
The US software firm revealed plans to invest about $1bn in new Linux and open source technologies for its Power Systems servers in a bid to boost efficiency for big data and cloud applications in scattered computing environments.
