India’s largest public sector lender, State Bank of India (SBI), has received a tax demand notice of ₹6,338 crore from the Income Tax Department, sparking discussion across the financial sector. The development was disclosed by the bank in an official filing to stock exchanges on March 20, 2026.

The notice is linked to the assessment for the financial year 2023–24. According to SBI, the tax authorities conducted a detailed scrutiny of its financial statements and disallowed certain expenses and claims reported by the bank. This process, known as “disallowance,” along with applicable interest, resulted in the substantial tax demand.

Part of Ongoing Tax Disputes
SBI clarified that the issue is not a one-off error but part of a series of ongoing tax-related disputes with authorities over previous years. The order, dated March 19, 2026, has been issued under provisions of Sections 143(3), 144C(3), and 144B of the Income Tax Act.

Given the size of the demand and its material significance, the bank disclosed the information promptly in line with corporate governance norms.

No Impact on Customers or Operations
Reassuring its customers and investors, SBI stated that the tax demand will not affect its day-to-day operations or business activities. The bank emphasized that its services will continue as usual without any disruption.

Legal Action Planned
SBI has also made it clear that it does not agree with the assessment and will challenge the order. The bank plans to file an appeal before the appropriate appellate authorities within the stipulated timeframe.

The development highlights ongoing complexities in tax assessments involving large financial institutions, though SBI’s strong stance indicates that the matter will now move through legal channels for resolution.