Company: INFY
Filing Date: 2025-07-01
Form Type: 20-F
Source: 0000950170-25-091925
Chunk: 95

Company: Infosys Ltd
Filing Date: 2025-07-01
Form: 20-F
Item: Item 5
Chunk 95
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.2             %
Effective tax rate   28.9            %       27.1            %                                            

Effective tax rate is generally influenced by various factors including differential tax rates, non-deductible expenses, exempt non-operating income, overseas taxes, tax reversals and provisions pertaining to prior periods, changes to tax regulations and other tax deductions.

Our effective tax rate in fiscal 2024 was lower primarily on account of reversal of tax provision due to receipt of order giving effects in fiscal 2024 for prior assessment years. Income tax expense for fiscal 2025 and 2024 includes provision (net of reversals) of $16 million, and reversals (net of provisions) of $113 million respectively. For fiscal 2025, the tax provisions comprise of additional provision of $86 million pertaining to prior periods which is offset by reversal of tax provision of $70 million made in earlier periods. For fiscal 2024, the tax provisions comprised of reversal of provisions of $151 million made in earlier periods offset by additional tax provision of $38 million pertaining to prior periods.

These reversals and provisions pertaining to prior periods are primarily on account of adjudication of certain disputed matters, upon filing of tax return and completion of assessments, across various jurisdictions.

 

During fiscal 2025, the Company received orders under section 250 of the Income Tax Act, 1961, from the Income Tax Authorities in India for the assessment years, 2016-17 and 2019-20. These orders confirmed the Company's position with respect to tax treatment of certain contentious matters. As a result, interest income (pre-tax) of $38 million along with the corresponding tax impact was recognized. Further a provision for income tax aggregating $21 million was reversed with a corresponding credit to the Statement of Profit and Loss. Also, an amount aggregating to $125 million has been reduced from contingent liabilities.

During fiscal 2024, the Company received orders under sections 250 and 254 of the Income Tax Act, 1961, from the Income Tax Authorities in India for the assessment years, 2007-08 to 2015-16, 2017-18 and 2018-19. These orders confirmed the Company's position with respect to tax treatment of certain contentious matters. As a result, interest income (pre-tax) of $232 million along with the corresponding tax impact was recognized. Further a provision for income tax aggregating $63 million was reversed with a corresponding credit to the Statement of Profit and