v3.26.1
Income Taxes
 12 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
Income Taxes

Note 12 - Income Taxes

 

The Company’s income tax expense majorly pertains to the Indian jurisdiction. Income / (Loss) before income taxes for the year ended March 31, 2026 and 2025, are as follows:

 

               
    Year Ended
March 31,		  
    2026     2025  
United States   $ 142     $ 956  
India     4,928       (8,175 )
Cayman Islands     (2,738 )     3,745  
UAE     1,090       (1,064 )
Singapore     (336 )     (18,701 )
Mexico     2,379       572  
Total   $ 5,465     $ (22,667 )

 

Provision for income taxes for the year ended March 31, 2026 and March 31, 2025, consisted of the following:

 

               
    Year Ended
March 31,		  
    2026     2025  
Current tax provision   $ 1,819     $ 1,037  
Deferred tax expense / (benefit)     172       (2,109 )
Provision for Income Taxes   $ 1,991     $ (1,072 )

 

Income tax expense / (benefit) for the years ended March 31, 2026 and, 2025 is allocated as follows:

 

               
    Year Ended
March 31,		  
    2026     2025  
Income / (Loss) from operations   $ 1,991     $ (1,072 )
Other comprehensive loss                
Unrecognized actuarial (loss) / gain on defined employee benefit plan obligations     (110 )     (35 )
Total   $ 1,881     $ (1,107 )

 

A reconciliation of the provision for income taxes, with the amount computed by applying the income tax rate for the Company to income before provision for income taxes for year ended March 31, 2026 and March 31, 2025, is as follows:

 

               
    Year Ended
March 31,
2026		  
    Amount     Percentage  
Income tax expense at tax rates applicable to the Company     -       0 %
                 
Increase (decrease) in income taxes resulting from:                
Non-deductible expenses     273       5 %
Valuation allowance     (49 )     (1 )%
Tax of earlier year     18       0 %
True down / up     (494 )     (9 )%
Loss / (income) taxed at different tax rate     (3 )     0 %
Adjustments for change in rates due to different tax jurisdiction     1,808       33 %
Set off against brought forward losses     -       -  
GILTI inclusion     -       -  
Foreign Dividends gross-up and additional employee deduction for employee hired-80JJA     (3 )     0 %
FTC Claim                
Others     441       8 %
Provision for income tax   $ 1,991       36 %

 

       
    Year Ended
March 31,		  
    2025  
(Loss) before income tax expense   $ (22,667 )
         
Income tax expense at tax rates applicable to the Company (i.e., 0%)     -  
         
Increase (decrease) in income taxes resulting from:        
Non-deductible expenses     812  
Valuation allowance     2,871  
Tax of earlier year     270  
True down / up     (85 )
Loss / (income) taxed at different tax rate     (4 )
Adjustments for change in rates due to different tax jurisdiction     (4,931 )
Set off against brought forward losses     (76 )
GILTI inclusion     113  
Foreign Dividends gross-up and additional employee deduction for employee hired-80JJA     2  
FTC Claim     (100 )
Others     56  
Provision for income tax   $ (1,072 )
Effective tax rate     4.73 %

 

Significant components of the Company’s deferred taxes as of March 31, 2026 and 2025, are as follows:

 

                                                                               
    As of March 31,  
    2026     2025  
    India     Singapore     USA     UAE     Mexico     India     Singapore     USA     UAE     Mexico  
Deferred tax assets:                                                                                
Property and equipment     530       -       -       -       -       541       -       -       -       -  
Gratuity     936       -       -       -       -       605       -       -       -       -  
Trade Payables     -       -       -       -       -       -       178       -       -       -  
Compensated absences     742       -       -       -       -       612       -       -       -       -  
Expenses allowed on payment basis / upon deposit of withholding taxes under section 43B / 40(a)(ia) of Indian Income Tax Act, 1961     72       -       -       -       -       83       -       -       -       -  
Net operating losses     765       2,749       -       -       -       1,245       2,597       -       96       -  
Finance lease     -       -       -       -       -       -       -       -       -       -  
Intangible assets under development     -     -       -       -       -       (5 )     -       -       -       -  
Provision for expenses     337       -       172       -       97       906       -       58       -       90  
Operating lease liabilities     2,273       -       -       -       -       2,413       -       -       -       -  
Others     2       -       -       -       -       2       -       -       -       -  
Deferred tax asset before valuation allowance     5,657       2,749       172       -       97       6,402       2,775       58       96       90  
Valuation Allowance     -       (2,749 )     -       -       -       -       (2,775 )     -       (96 )     -  
Deferred tax asset, net of valuation allowance     5,657       -       172       -       97       6,402       -       58       -       90  

 

    As of March 31,  
    2026     2025  
    India     Singapore     USA     UAE     Mexico     India     Singapore     USA     UAE     Mexico  
Deferred tax liabilities:                                                                                
Investments     (232 )     -       -       -       -       (192 )     -       -       -       -  
Property and equipment     -       -       (1 )     -       (12 )     -       -       (1 )     -       (3 )
Operating right-of-use assets     (2,161 )     -       -       -       -       (2,306 )     -       -       -       -  
Unbilled Revenue     -       -       -       -       -       -       -       -       -       (91 )
Others     (28 )     -       -       -               (32 )     -       -       -          
Deferred tax liability     (2,421 )     -       (1 )     -       (12 )     (2,530 )     -       (1 )     -       (94 )
Net deferred tax asset (liability)     3,236       -       171       -       85       3,872       -       57       -       (4 )

 

               
    As of
March 31,		  
Classified as   2026     2025  
Deferred tax assets non-current   $ 3,689     $ 4,064  
Deferred tax liabilities non-current     197       139  
    $ 3,492     $ 3,925  

 

Net cash paid (refunds received) for income taxes for the year ended March 31, 2026 are as follows:

 

       
    2026  
United States   $ 292  
India     784  
Cayman Islands     -  
UAE     -  
Singapore     -  
Mexico     203  
Total   $ 1,280  

 

Net operating loss

 

The Company has carry forward losses of $35, $70 & $2,975 in the Indian jurisdiction, which will get expired in financial years 2028-29; 2029-30 and 2032-33 respectively.

 

With certain immaterial exceptions, the Company is no longer subject to U.S. federal, state and local or other U.S. income tax examinations by taxing authorities for years prior to 2022. The Company’s subsidiaries in India are open to examination by relevant taxing authorities for tax years beginning on or after April 1, 2016. The Company regularly reviews the likelihood of additional tax assessments and adjusts its unrecognized tax benefits as additional information or events require.

 

Valuation Allowances

 

As of March 31, 2026, the Company maintained valuation allowances of $2,749 for deferred tax assets that are not more likely than not to be realized, which primarily included deferred tax assets towards Net Operating Losses (NOL) in Singapore and UAE jurisdictions. The valuation allowances on our deferred tax assets decreased by $122 in year ended March 31, 2026 as compared to increase by $2,871 during the year ended March 31, 2025, respectively. During the year ended March 2026, based on the relevant weight of positive and negative evidence, including the amount of net operating losses in recent years, and consideration of our future taxable earnings, we concluded most of our Singapore and UAE deferred tax assets are not more like than to be realized. Our deferred tax assets without valuation allowances are more like than not to be realized given the expectation of future earnings in the respective jurisdictions.

 

Unrecognized tax benefits

 

The Company recognizes financial statement benefit of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. As of March 31, 2026 and March 31, 2025, the Company does not have any unrecognized tax benefits with a significant impact on its consolidated financial statements.

 

The Company’s major tax jurisdictions are Singapore, India, the United States, and Mexico. Generally accepted accounting principles requires the Company’s management to evaluate tax positions taken by the Company and recognize a tax liability for any uncertain positions that more likely than not would not be sustained upon examination by the Internal Revenue System (the “IRS”) or a foreign jurisdiction taxing authority. The Company is subject to routine audits by tax authorities.

 

Deferred tax has not been recognized on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that is indefinitely reinvested. This amount becomes taxable upon a repatriation of assets from the subsidiary or a sale or liquidation of the subsidiary. The amount of such temporary differences totaled approximately $10,435, with an income tax impact of approximately $1,454 as of March 31, 2026.