Income tax authorities have served a notice to Infosys Technologies for payment of tax of Rs.500 million ($11 million) for fiscal 2001-02 after the company was denied some exemptions under the Income Tax Act.

In its filing to the US Securities Exchange Commission (SEC), the Nasdaq-listed Infosys disclosed that additional tax, including an interest of Rs.150 million, was levied by the income tax department April 15 after the company completed its tax review.

"We intend to contest the demand. The management and tax advisors believe the company's position will be upheld in the appellate process," Infosys said in the filing.

The income tax department denied tax exemptions to Infosys under section 10A of the Income Tax Act on some expenses incurred by the company in foreign currency.

"The management believes the ultimate outcome of this proceeding will not have a material adverse effect on the financial position and results of operations," the company informed the SEC.

Recently, Wipro, another Bangalore-based IT bellwether, was asked to cough up an additional Rs.2.62 billion as income tax dues for the year ended March 2002.