Hindustan Unilever receives ₹1,986 crore tax demand notice for FY2020-21. Here's why

Fast-moving consumer goods (FMCG) giant Hindustan Unilever (HUL), on Friday, 31 October 2025, announced that the company has received a ₹1,986 crore tax demand notice from the Mumbai Assistant Commission of Income-Tax, according to an exchange filing.

“Assessment Order u/s 143(3)read with Sec. 144C(13) Income Tax Act, 1961 (ITA), along with Notice of Demand of ₹1,986.25 crores u/s 156 of the ITA,” the company informed the exchanges through its filing.

In the NSE filing, the tax authority challenged the valuation of certain related party transactions and corporate tax disallowances, which the company has allegedly carried out in the nature of depreciation claimed.

“The Tax authorities have made transfer pricing adjustments in the nature of disallowance of payments to related parties or challenged the valuation of such related party payments and corporate tax disallowances in the nature of depreciation claimed,” according to the filing data.

What does HUL plan to do?

In the NSE filing, HUL mentioned that the company plans to file a necessary appeal with the appellate authority to challenge the tax demand notice, which has been imposed for the period of the financial year ending 2020-21.

“The Company will file necessary appeal with the appellate authority in this regard within the permissible timeline,” the company said.

According to the official announcement, this ₹1,986 crore tax demand notice will have “no material impact on financial” or operations of the company.

HUL share price trend

Hindustan Unilever shares closed 0.34% lower at ₹2,461.20 after Friday's stock market session, compared to ₹2,469.60 at the previous market close. The company disclosed its tax demand order after market operating hours on Friday, 31 October 2025.

HUL shares have given stock market investors more than 18% returns on their investment in the last five years. However, the company's shares have lost 2.65% in the last one-year period.

On a year-to-date (YTD) basis, the company's shares have risen 5.99% in 2025 but have dropped 2.12% in the last one-month period. HUL shares are trading 2.25% lower in the last five market sessions on the Indian stock market.

Shares of the company hit their 52-week high level at ₹2,750 on 4 September 2025, while the 52-week low level was at ₹2,136, according to the data collected from the NSE website.

The company's market capitalisation (M-Cap) stood at more than ₹5.78 trillion as of the stock market close on Friday, 31 October 2025.

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