Arkade Developers Faces ₹1.26 Crore Tax Demand and Penalty

Tax authorities have issued an order imposing a demand of ₹1,14,62,603 and a penalty of ₹11,46,260 on Arkade Developers Limited. The total potential financial burden from this order amounts to ₹1,26,08,863.

This action stems from the disallowance of Input Tax Credit (ITC) claimed by the company for transactions during the financial years 2019-20, 2020-21, and 2021-22. Input Tax Credit allows businesses to claim credit for taxes paid on inputs used in their supply chain. The disallowance means tax authorities dispute the validity or eligibility of these credits.

Arkade Developers has stated that the order is not expected to materially affect its financial health or operations. The company is currently seeking legal counsel to explore filing an appeal against the imposed tax demand and penalty.

The Mumbai-based real estate firm, which focuses on high-end residential projects, recently reported a dip in its Q3 FY26 financial performance, with revenue and net profit declining year-on-year and quarter-on-quarter. Despite these challenges, Arkade Developers maintains a robust project pipeline and has pursued strategic initiatives, including a demerger of its rental business operations sanctioned by the NCLT. Earlier this year, the company confirmed it does not meet SEBI's criteria for a 'Large Corporate', thus bypassing more stringent debt issuance regulations.

Arkade Developers operates in the competitive Indian real estate market, primarily within Mumbai. Its peers include larger entities like DLF, Macrotech Developers (Lodha), Godrej Properties, Oberoi Realty, and Prestige Group, which have broader national footprints and significantly higher market capitalizations.