Company: INFY
Filing Date: 2025-07-01
Form Type: 20-F
Source: 0000950170-25-091925
Chunk: 94

Company: Infosys Ltd
Filing Date: 2025-07-01
Form: 20-F
Item: Item 5
Chunk 94
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 services from the SEZ units registered under the Special Economics Zones (SEZs) Act, 2005 in the prior years. SEZ units who began to provide services on or after April 1, 2005, were eligible for an income tax deduction of 100% of profits or gains derived from the export of services for the first five years beginning with the assessment year relevant to the previous year in which the SEZ unit begins to provide services and 50% of such profits or gains for the five years thereafter. Up to 50% of such profits or gains were also available for a further five years subject to creation of a Special Economic Zone Re-Investment Reserve out of the profit of the eligible SEZ units and utilization of such reserve by the Company for acquiring new plant and machinery for the purpose of its business as per the provisions of the Income Tax Act. In the event, the Company is not able to utilize the SEZ reserve for investment in plant and machinery within the timeline specified under the Income Tax Act, Company will have to pay tax on the unutilized reserve following the expiry of year specified. This would result in an increase in effective tax cost.
For fiscal 2025, the income tax expense of the Company has been recognized by applying the provision of section 115BAA of the Income Tax Act without claim of deduction for SEZ units under section 10AA of the Income Tax Act. For the fiscal 2024, a portion of our pre-tax income was not been subject to income tax due to above tax incentives. These tax incentives resulted in a decrease in our income tax expense of $363 million for fiscal 2024, compared to the tax amounts that we estimate we would have been required to pay if these incentives had not been available. The per share effect of these tax incentives computed based on both basic and diluted weighted average number of equity shares for fiscal 2024 was $0.09. See Note 2.18, Income Taxes, under Item 18 of this Annual Report on Form 20-F for reconciliation of the income tax provision to the amount computed by applying the statutory income tax rate to the income before income taxes.
The following table sets forth our income tax expense and effective tax rate for fiscal 2025 and fiscal 2024:

                     (Dollars in millions)                                                                
                     Fiscal 2025             Fiscal 2024             Change              Percentage       
                                                                                         Change           
Income tax expense           1,285                   1,177           108                 9