v3.25.2
Income taxes
 12 Months Ended
Mar. 31, 2025
Income taxes
23. Income taxes
Income tax expense is comprised of the following:

 
  
Fiscal year ended March 31,
 
 
  
2023
 
  
2024
 
  
2025
 
  
2025
 
 
  
(In millions)
 
Current tax expense
    Rs. 156,782.9      Rs.  140,308.9      Rs. 199,251.5      US$  2,332.3  
Deferred tax expense/ (benefit)
      12,280.9        (57,133.2 )       (15,613.6 )      (182.8 )
 
Interest on income tax refund
      (2,946.4 )       (5,348.6 )       (8,623.0 )       (100.9 )
  
 
 
     
 
 
     
 
 
     
 
 
  
Income tax expense
    Rs.  166,117.4      Rs.  77,827.1      Rs.  175,014.9      US$ 2,048.6  
  
 
 
     
 
 
     
 
 
     
 
 
  
Income tax (expense)/ benefit recorded in other comprehensive income was Rs. 16,980.0
 million
, Rs. (17,828.6) 
million and Rs. (41,283.1)
 
million (US$ (483.2))
million for the fiscal years ended March 31, 2023, March 31, 2024 and March 31, 2025, respectively.
Income before income tax expense and income tax expense are substantially all from India.
 
 
A reconciliation of taxes at the Indian statutory income tax rate, the income tax rate of the Bank’s country of domicile, to income tax expense as reported is as follows:
 
 
  
Fiscal year ended March 31,
 
 
  
2023
 
 
2024
 
 
2025
 
 
2025
 
 
  
(In millions)
 
Income before income tax expense
    Rs. 662,381.8     Rs. 705,459.0       Rs. 861,546.2     US$  10,084.5  
Statutory income tax rate
      25.17 %      25.17 %      25.17 %      25.17 % 
Expected income tax expense
      166,708.3       177,549.9       216,833.8       2,538.1  
Adjustments to reconcile expected income tax to actual tax expense
         
Interest on income tax refund
      (2,204.9 )      (4,125.0 )      (6,452.8 )      (75.5 )
Stock-based compensation
      1,645.9       (10,645.6 )      1,427.1       16.7  
Income subject to rates other than the statutory income tax rate
      (6.8 )      (1,262.0 )      (910.8 )     (10.7 )
Remeasurement of deferred taxes for investment in subsidiaries and affiliates
     —        —        (11,503.2 )      (134.6 )
Special reserve deduction
      —        (5,143.2 )      (8,053.7 )     (94.3 )
Unrecognized tax benefit of earlier years including consequential tax credit pursuant to favourable orders received recognised
    —      (80,874.4 )      (16,515.6 )     (193.3 )
Other, net
      (25.1 )      2,327.4       190.1       2.2  
  
 
 
    
 
 
    
 
 
    
 
 
  
Income tax expense
    Rs.  166,117.4     Rs.   77,827.1       Rs. 175,014.9     US$ 2,048.6  
  
 
 
    
 
 
    
 
 
    
 
 
  
The tax effects of significant temporary differences are as follows:
 
 
  
As of March 31,
 
 
  
2024
 
  
2025
 
  
2025
 
 
  
(In millions)
 
Tax effect of:
         
Deductible temporary differences:
         
Allowance for credit losses
    Rs. 43,093.6      Rs. 69,769.8      US$ 816.7  
Investments
      7,704.7        235.4        2.8  
Lease liabilities
      32,034.7        37,099.8        434.3  
Undistributed policyholders earnings account
      —         32,960.6        385.8  
Employee benefits
      4,632.2        4,062.2        47.6  
Borrowings
      10,714.9        10,468.3        122.5  
Stock based compensation
      20,166.2        19,009.0        222.5  
Others
      320.1        734.9      8.6
  
 
 
     
 
 
     
 
 
  
Deferred tax asset
      118,666.4        174,340.0        2,040.8  
  
 
 
     
 
 
     
 
 
  
Taxable temporary differences:
         
ROU Asset
      32,009.3        37,087.5        434.1  
Property, plant and equipments
      —         5,795.7        67.8  
Loan origination cost
      7,541.1        9,992.1        117.0  
Intangible assets
      313,272.2        306,920.5         3,592.7  
Investments
      53,998.2        92,614.8        1,084.1  
Liabilities on policies in force
      —         26,315.8        308.0  
Others
      —        9,438.9        110.5  
  
 
 
     
 
 
     
 
 
  
Deferred tax liability
      406,820.8        488,165.3        5,714.2  
  
 
 
     
 
 
     
 
 
  
Net deferred tax asset/ (liability)
    Rs.  (288,154.4 )     Rs.  (313,825.3 )
 
    US$ (3,673.4 )
 
  
 
 
     
 
 
     
 
 
  
Management believes that the realization of the recognized deferred tax assets is more likely than not and the realization is based
on
a combination of reversing taxable temporary differences and expectations as to future income before Income tax expense. On the proposed sale of Bank’s stake in HDBFSL a deferred tax liability has been recognized.
 
 
The total unrecognized tax benefit as of March 31, 2024 and March 31, 2025 is Rs. 22,042.3 million and Rs. 6,717.3 
million (US$ 78.6 million), respectively. The major income tax jurisdiction for the Bank is India. The open tax years (first assessment by the taxing authorities) are pending from fiscal year 2019 onwards. However, appeals filed by the Bank are pending with various local tax authorities in India for earlier tax years. 
A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows:
 
 
  
Fiscal year ended March 31,
 
 
  
2023
 
  
2024
 
  
2025
 
  
2025
 
 
  
(In millions)
 
Opening balance
    Rs. 46,774.3      Rs. 48,792.1      Rs. 22,042.3      US$ 258.0  
Increase related to acquisition of eHDFC
      —         52,980.5        —         —   
Decrease related to prior year tax positions
      —          (80,874.4 )        (16,515.6 )        (193.3 ) 
Increase related to current year tax positions
      2,017.8        1,144.1        1,190.6        13.9  
  
 
 
     
 
 
     
 
 
     
 
 
  
Closing balance
    Rs.  48,792.1      Rs.  22,042.3      Rs.  6,717.3      US$  78.6  
  
 
 
     
 
 
     
 
 
     
 
 
  
The Bank’s total unrecognized tax benefits, if recognized, would reduce the income tax expense by Rs. 22,042.3 million and Rs. 6,717.3 
million (US$ 78.6 million) as of March 31, 2024 and March 31, 2025, respectively, and thereby would affect the Bank’s effective tax rate. All of the Bank’s unrecognized tax benefits are presented as unrecognized refund claims. 
Significant changes in the amount of unrecognized tax benefits within the next 12 months cannot be reasonably estimated as the changes would depend upon the progress of tax examinations with various tax authorities.