|
30 Tax expense |
||||||
|
(₹ In Crore) |
||||||
|
Particulars |
For the year ended 31 March |
|||||
|
2025 |
2024 |
|||||
|
|
||||||
|
(a) |
Tax expense |
|||||
|
Current tax |
||||||
|
Current tax on profits for the year |
2,559.04 |
2,283.60 |
||||
|
|
||||||
|
Deferred tax |
||||||
|
Decrease/(increase) in deferred tax assets |
10.28 |
(11.87) |
||||
|
(Decrease)/increase in deferred tax liabilities |
331.15 |
71.49 |
||||
|
Total deferred tax expense/(benefit) |
341.43 |
59.62 |
||||
|
|
||||||
|
Tax expenses |
2,900.47 |
2,343.22 |
||||
|
|
||||||
|
(b) |
Reconciliation of tax expenses and the accounting profit multiplied by India's tax rate |
|||||
|
Profit before tax |
11,051.89 |
9,822.01 |
||||
|
Tax at the Indian tax rate of 25.17% (Previous year – 25.17%) |
2,781.54 |
2,472.00 |
||||
|
Tax effect of amounts which are not deductible (taxable) in calculating taxable income: |
||||||
|
– |
Corporate social responsibility expenditure and donations |
45.89 |
33.15 |
|||
|
– |
Rate difference in amortisation of fixed income securities |
(0.47) |
(2.58) |
|||
|
– |
Others |
26.86 |
22.97 |
|||
|
– |
One time impact due to change in tax rates * |
211.26 |
– |
|||
|
|
||||||
|
Tax effect of amounts which are deductible (non taxable) in calculating taxable income: |
||||||
|
– |
Dividend received on strategic investment |
(7.58) |
(10.84) |
|||
|
– |
Profit on investments not taxable |
(153.07) |
(28.83) |
|||
|
– |
Income from fair valuation of mutual funds |
(3.10) |
(142.73) |
|||
|
– |
Disallowance of expenditure incurred on rented property (net) |
(0.86) |
0.08 |
|||
|
Tax expense |
2,900.47 |
2,343.22 |
||||
* The Company invests its surplus funds into a range of asset classes including debt mutual funds, index funds and fixed maturity plans. In compliance with Ind AS 12, the Company was making accounting provisions for Deferred Tax as per applicable law (taking cognizance of the indexation impact) on changes in fair value on these investments.
The Finance (No. 2) Act, 2024 withdrew the indexation benefit on long-term capital gains on debt mutual funds which were purchased prior to 1 April 2023 and the tax rate with respect to long-term capital gains for the said asset class was changed from 20% plus surcharge and cess (with indexation) to 12.5% plus surcharge and cess (without indexation).
Due to withdrawal of the indexation benefit and change in tax rate, the accounting provision for Deferred Tax created on Investment Income has been consequently increased by ₹ 211.26 crore as a cumulative one-time provision while computing the profit after tax for the reporting period.
It is to be noted that only a provision is being made in the books of accounts at this point of time to record the Deferred Tax in line with the applicable accounting standards and the recently enacted tax change. The actual payment of tax would be made at the time of redemption of this asset class. The cash outflow towards tax could be different at the time of redemption depending on the actual gain and prevailing tax regulations.