v3.26.1
Income Taxes
 12 Months Ended
Mar. 31, 2026
Income Taxes [Abstract]  
Income taxes
18Income taxes

 

Cayman Islands and British Virgin Islands

 

SMJ International Holdings Inc. and its subsidiary, SMJ Furnishings Inc., are domiciled in the Cayman Islands and British Virgin Islands, respectively. The locality currently enjoys permanent income tax holidays; accordingly, SMJ International Holdings Inc. and SMJ Furnishings Inc. do not accrue for income taxes.

 

Singapore

 

The subsidiary, SMJ Furnishings (S) Pte. Ltd. is incorporated in Singapore and is subject to Singapore Corporate Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Singapore tax laws. The applicable tax rate is 17% in Singapore.

 

Significant components of the provision for income taxes are as follows:

 

   Year ended March 31 
   2024   2025   2026   2026 
   S$   S$   S$   US$ 
                 
Income tax expense comprised of the following:                    
Current income tax                    
Current year   70,500    36,098    
-
    
-
 
(Over) under provision current taxation in respect of prior year   (46,935)   (24,719)   112,225    87,042 
    23,565    11,379    112,225    87,042 
Deferred income tax                    
Current year             115,303    89,429 
Under provision of deferred tax in respect of prior year    123,389    106,620    101,275    78,549 
    146,954    117,999    328,803    255,020 

A reconciliation between the statutory tax rate to the effective tax rate are as follows:

 

   Year ended March 31 
   2024   2025   2026   2026 
   S$   S$   S$   US$ 
                 
Income (loss) before tax   1,926,102    1,134,379    (596,863)   (462,926)
                     
Tax calculated at tax rate @17% (2025 and 2024: 17%)   327,437    192,844    (101,467)   (78,698)
Effects of:                    
 - Tax effect on expense not deductible for tax purposes   24,666    31,396    686,515    532,461 
 - Income not subject to tax   (102,789)   (28,000)   (448,078)   (347,529)
 - Singapore statutory stepped income exemption   (17,425)   (17,425)   (11,857)   (9,196)
 -Tax rebate   (38,000)   (36,097)   (5,503)   (4,268)
- Under provision of deferred tax in respect of prior year   
-
    
-
    101,275    78,549 
- Utilization of capital allowance   
-
    
-
    (4,307)   (3,341)
 - (Over) under provision of current taxation in respect of prior year   (46,935)   (24,719)   112,225    87,042 
Tax charge   146,954    117,999    328,803    255,020 
Effective tax rate   7.6%   10.4%   (55.1)%   (55.1)%

 

Deferred tax assets

 

Significant components of deferred tax assets are as follows:

 

   As of March 31, 
   2025   2026   2026 
   S$   S$   US$ 
             
Property and equipment   419,360    (133,232)   (103,335)
Fair value gain on other investment   102,069    143,862    111,579 
Allowance for credit losses   831,665    94,739    73,480 
Allowance for inventory obsolescence   109,374    83,113    64,462 
Deferred tax assets   1,462,468    188,482    146,186 
At Singapore tax rate of 17%   248,620    32,042    24,852 

The Company has recognized deferred tax assets arising from temporary differences primarily related to depreciation, fair value adjustments on investments, and provisions. The Company believes it is more likely than not that the deferred tax assets will be realized, and accordingly, no valuation allowance has been recorded as of March 31, 2026.

 

Uncertain Tax Positions

 

In accordance with ASC 740-10, the Company evaluates each uncertain tax position based on its technical merits, and measures any unrecognized benefits associated with tax positions. Each position is reviewed individually, considering past audits, interpretations of tax law, and developments in tax regulations. The Company assesses whether it is more likely than not that a tax position will be sustained upon examination by the relevant tax authorities, based solely on the technical merits of the position.

 

As of March 31, 2025 and 2026, the Company did not have any significant unrecognized uncertain tax positions. The Company also did not accrue any liability, interest, or penalties related to uncertain tax positions, as there were no positions where it was determined that an unfavorable outcome was probable.

 

The Company continues to monitor developments in tax law and evaluates any changes in its tax positions on a quarterly basis. Should any uncertain tax positions arise in the future, the Company will measure and record any potential liabilities in accordance with ASC 740.