Company: ZCARW
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076590
Chunk: 25

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 25
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 due to short-term maturities
of these instruments.

xxvi.Troubled debt restructuring

As per ASC 470-60 Troubled Debt
Restructuring (TDR) refers to a situation where the creditor, grants concessions to a borrower experiencing financial difficulties. These
concessions may include modifications to the terms of the payable, such as reducing the interest rate, extending the repayment period,
or forgiving a portion of the payable. Such restructuring is done with the intent to provide relief to the borrower and to maximize the
potential for payable recovery by the Company.

In accordance with ASC 470-60,
when the total future cash payments under the new terms are less than the carrying amount of the payable at the date of restructuring,
the difference between the carrying amount and the total future cash payments is recognized as a ‘Gain on Troubled Debt Restructuring’
in the Condensed Consolidated Financial
Statements. This gain is recorded immediately in the period the restructuring occurs.

20

ZOOMCAR HOLDINGS, INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

If the total future cash payments
under the new terms exceed the carrying amount of the payable at the date of restructuring, no adjustment to the carrying amount of the
payable is made. Instead, the company calculates a New Effective Interest Rate (EIR) based on the revised terms of the restructured payable.
The debt is then amortized over the remaining life of the payable using the new EIR, with interest expense recognized based on this rate
in future periods.

xxvii.Taxes

Income taxes are accounted for
under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable
to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and
operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance
is recorded for deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company recognizes the effect
of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured
at the