The Indian taxman has sent Biggish Blue a stiff demand to pay $866.20 million in outstanding income tax on fiscal 2009 revenue.
An IBM India spokeswoman confirmed the company had received a tax notice, but does not think the bill is accurate.
According to the Business Standard, India's Income Tax office issued the company a notice for under-reporting revenue for fiscal 2009 by the Indian unit.
Big Blue said that IBM does not agree with the tax department's claims and will aggressively defend itself through the appropriate judicial process.
IBM has been arguing with the taxman over its 2009 tax return for ages.
It told the US Securities and Exchange Commission (SEC), that it had allocated $394 million in prepaid income tax in India "at" September 30, 2013. IBM said a "significant portion" of that amount was paid in order to reserve its right to appeal previous tax assessments in India, which it said it expects to win.
India appears to have lost patience with multinationals skimping on their tax bills. It is chasing tax claims against several multinationals, including Royal Dutch Shell, and Vodafone.