Indian court orders tax department to lift freeze on Cognizant's funds

IT services company Cognizant Technology Solutions Corp said on Tuesday an Indian court had granted the company’s application to lift the Indian income tax department’s freeze on its bank accounts.

The tax department had frozen the company’s bank accounts last month for allegedly evading a dividend distribution tax of more than 25 billion rupees ($385 million) following a share buyback, according to reports in the Indian media.

The court asked the company to deposit 15 per cent of the disputed tax, amounting to 4.9 billion rupees ($75 million) as security deposit till it decides on the case.

The company said the court further granted its request to address the tax department’s collection actions and scheduled a hearing later in April 2018.

Cognizant shares were up nearly 1 per cent in later afternoon trading on the Nasdaq.