Jayalalithaa's Veda Nilayam: I-T Dept Threatens Auction Over ₹20 Crore Tax Dues

The Income Tax Department has unequivocally informed the Madras High Court that the iconic Poes Garden residence of late former Tamil Nadu Chief Minister J. Jayalalithaa, known as Veda Nilayam, faces auction if the substantial tax arrears, coupled with accumulated interest, are not settled by her legal heirs. This significant development unfolded during a court hearing on February 5, 2026, concerning a writ petition filed by Jayalalithaa's niece, J. Deepa, challenging the I-T department's demand for payment. The total outstanding amount, encompassing income tax arrears for various assessment years from 1991-92 to 2006-07 and wealth tax arrears from 1992-93 to 2015-16, now stands at approximately ₹20 crore. Initially, the demand was around ₹13 crore, but it has increased with accrued interest. The I-T department's senior standing counsel, A.P. Srinivas, appearing before Justice C. Saravanan, emphasized that Veda Nilayam was, in fact, attached during Jayalalithaa's lifetime due to non-payment of taxes. He clarified that if those with interests in Jayalalithaa's properties do not pay the arrears, the department would proceed with the auction as per the Income Tax Act. Following Jayalalithaa's demise on December 5, 2016, the Madras High Court declared her niece, J. Deepa, and nephew, J. Deepak Jayakumar, as her legal heirs on May 27, 2020. Subsequently, the Income Tax Department issued notices to them on July 13, 2025, and August 4, 2025, to recover the pending arrears. While Deepa has challenged the communication in the High Court, Deepak sought time to pay his share of ₹6.75 crore in tax arrears. The I-T department had accepted Deepak's request, permitting him to pay his portion in six equated monthly instalments between October 2025 and March 2026. However, the department noted that Deepak had made partial payments of ₹1.12 crore and ₹62.50 lakh, but a portion of this amount was paid by mentioning his PAN number instead of Jayalalithaa's PAN number, a discrepancy that remains uncorrected despite reminders. ETV Bharat reported that as of January 31, 2026, the outstanding income tax with interest was over ₹9 crore, and wealth tax amounted to over ₹11 crore, totaling around ₹20 crore. This ongoing legal battle is further complicated by the history of Veda Nilayam. In a prior attempt, the erstwhile AIADMK government had acquired the property in 2020 with the intention of converting it into a memorial. The state government had even deposited ₹67.9 crore in a city civil court, which included a sum of ₹36.9 crore earmarked for Jayalalithaa's IT and wealth tax arrears. However, this acquisition was challenged by Deepa and Deepak. In November 2021, the Madras High Court quashed the government's order to acquire Veda Nilayam for a memorial, directing the property to be handed over to Deepa and Deepak as legal heirs. This decision was upheld by the High Court in January 2022, citing procedural illegalities and lack of public purpose in the acquisition, ultimately leading to the keys being returned to the legal heirs. The current stance of the Income Tax Department to auction the property underscores the continuing financial liabilities associated with Jayalalithaa's estate, now resting on her legal heirs. The Madras High Court has adjourned the hearing on Deepa's writ petition to February 18, 2026, indicating that a resolution to this long-standing tax dispute is still in progress. This case remains a prominent legal and political story in Tamil Nadu.

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