Vijay’s Rs 1.5 Crore Tax Penalty Case: Madras HC Reserves Order - What's 11-Year-Old Issue All About?

Tamil film superstar and TVK leader Vijay is once again making headlines as the Madras High Court has reserved its verdict on a Rs 1.5 crore income tax penalty case that has been pending for over a decade.

The penalty is linked to additional income of Rs 15 crore disclosed by Vijay for the financial year 2015-16, much of it linked to his 2015 film big-budget film Puli, which involved untaxed cash payments. The matter has gone through multiple appeals, writ petitions, and interim orders over the years. This comes in a time when Vijay’s highly anticipated film Jana Nayagan is already facing legal hurdles and censorship issues, which have indefinitely postponed its release, originally scheduled for January 9, 2026.

What Is Vijay's Rs 1.5 Crore Tax Penalty Case About?

The case dates back to 2015 when the Income Tax (I-T) department carried out a search and seizure at Vijay’s premises. The records revealed that PT Selvakumar and Shibu of SKT Studios, producers of Vijay’s 2015 film Puli, had paid Vijay Rs 4.93 crore in cash in addition to Rs 16 crore via cheques. While TDS (Tax Deducted at Source) was deposited for the cheque payments, no tax was deducted on the cash portion of the transaction. Upon questioning, Vijay reportedly admitted to receiving the amount and agreed to pay the taxes for it. On July 29, 2016, Vijay filed his income tax return for the assessment year 2016-17, declaring a total income of Rs 35.42 crore, which included the additional Rs 15 crore.

While filing, he also claimed depreciation on assets worth Rs 17.81 lakh and sought exemptions of Rs 64.71 lakh for his fans’ club expenses. However, the Income Tax Department rejected these claims and, on December 30, 2017, issued an assessment order fixing his taxable income at Rs 38.25 crore. The order further noted that the disclosure of the additional income came only because of the earlier search and seizure operation done at his house.

What Is The Legal Status Of Vijay's 2015 Tax Penalty Case

The I-T department imposed a penalty under Sections 271(1)(c) and 271AAB(1) of the Income Tax Act. Vijay appealed the assessment order and the penalty under Section 271(1)(c), but challenged the Section 271AAB(1) penalty separately through a writ petition in 2022. Justice Anita Sumanth initially admitted the petition and temporarily stayed the recovery of the penalty. This interim order has been extended multiple times while the case has moved through different benches. Senior I-T counsel A.P. Srinivas argued in court that the penalty was imposed correctly, while Vijay’s lawyers contended that the proceedings were delayed beyond the legal time limit. The High Court’s decision is now awaited.

Meanwhile on the work front, Vijay is currently awaiting the release of Jana Nayagan. Directed by H Vinoth, it is inspired from the film Bhagavanth Kesari directed by Anil Ravipudi. Jana Nayagan marks his final film before his full-fledged political entry.