Income Taxes (Tables)

12 Months Ended

Mar. 31, 2023

Major components of tax expense (income) [abstract]

Schedule of Income Tax Expense

Income tax expense in the consolidated statement of comprehensive income comprises:

	(Dollars in millions)
	Year ended March 31,
	2023			2022			2021
Current taxes
Domestic taxes		830			785			716
Foreign taxes		323			263			185
		1,153			1,048			901
Deferred taxes
Domestic taxes		54			48			85
Foreign taxes		(65	)		(28	)		(13	)
		(11	)		20			72
Income tax expense		1,142			1,068			973

Summary of Reconciliation of Income Tax Provision to Amount Computed by Applying Statutory Income Tax Rate to Income Before Income Taxes

A reconciliation of the income tax provision to the amount computed by applying the statutory income tax rate to the income before income taxes is summarized below:

	(Dollars in millions)
	Year ended March 31,
	2023			2022			2021
Profit before income taxes		4,125			4,036			3,596
Enacted tax rates in India		34.94	%		34.94	%		34.94	%
Computed expected tax expense		1,442			1,410			1,256
Tax effect due to non-taxable income for Indian tax purposes		(362	)		(395	)		(346	)
Overseas taxes		132			132			95
Tax provision (reversals)		(13	)		(36	)		(47	)
Effect of differential tax rates		(41	)		(26	)		(17	)
Effect of exempt non-operating income		(6	)		(7	)		(5	)
Effect of unrecognized deferred tax assets		14			10			1
Effect of non-deductible expenses		19			22			20
Impact of change in tax rate		—			(13	)		—
Others		(43	)		(29	)		16
Income tax expense		1,142			1,068			973

Summary of Expiration of Unused Tax Losses

The following table provides details of expiration of unused tax losses for fiscal 2023:

(Dollars in millions)
Year
2024	15
2025	17
2026	18
2027	10
2028	60
Thereafter	418
Total	538

The following table provides details of expiration of unused tax losses for fiscal 2022:

(Dollars in millions)
Year
2023	27
2024	20
2025	17
2026	20
2027	7
Thereafter	501
Total	592

Summary of Income Tax Assets and Income Tax Liabilities

The following table provides the details of income tax assets and income tax liabilities as of March 31, 2023, and March 31, 2022:

(Dollars in millions)
	As of
	March 31, 2023			March 31, 2022
Income tax assets		786		812
Current income tax liabilities		(412	)		(344	)
Net current income tax assets / (liabilities) at the end		374			468

The gross movement in the current income tax assets / (liabilities) for fiscal 2023, 2022 and 2021 is as follows:

	(Dollars in millions)
	Year ended March 31,
	2023			2022			2021
Net current income tax assets / (liabilities) at the beginning		468			501			515
Translation differences		(32	)		(18	)		17
Income tax paid		1,088			1,020			863
Current income tax expense		(1,153	)		(1,048	)		(901	)
Income tax on other comprehensive income		(2	)		2			1
Income tax benefit arising on exercise of stock options		6			10			6
Tax impact on buyback expenses		1			1			—
Additions through business combination		(2	)		—			—
Net current income tax assets / (liabilities) at the end		374			468			501

Summary of Movement in Gross Deferred Income Tax Assets / Liabilities

The movement in gross deferred income tax assets / liabilities (before set off) for fiscal 2023 is as follows:

												(Dollars in millions)
	Carrying value as of April 1, 2022			Changes through profit and loss			Addition through business combination			Changes through OCI		Translation difference			Carrying value as of March 31, 2023
Deferred income tax assets / (liabilities)
Property, plant and equipment		21			2			—			—		(2	)		21
Lease liabilities		24			6			—			—		(3	)		27
Accrued compensation to employees		7			2			—			—		(1	)		8
Trade receivables		28			6			—			—		(2	)		32
Compensated absences		70			6			—			—		(6	)		70
Post sales client support		17			14			—			—		(1	)		30
Credits related to branch profits		89			(2	)		—			—		—			87
Derivative financial instruments		(3	)		3			—			—		—			—
Intangibles		6			1			—			—		—			7
Intangibles arising on business combinations		(41	)		9			(10	)		—		—			(42	)
Branch profit tax		(110	)		5			—			—		—			(105	)
SEZ reinvestment reserve		(112	)		(62	)		—			—		10			(164	)
Others		11			21			—			—		—			32
Total Deferred income tax assets / (liabilities)		7			11			(10	)		—		(5	)		3

The movement in gross deferred income tax assets / liabilities (before set off) for fiscal 2022 is as follows:

										(Dollars in millions)
	Carrying value as of April 1, 2021			Changes through profit and loss			Changes through OCI			Translation difference			Carrying value as of March 31, 2022
Deferred income tax assets / (liabilities)
Property, plant and equipment		35			(13	)		—			(1	)		21
Lease liabilities		23			2			—			(1	)		24
Accrued compensation to employees		6			2			—			(1	)		7
Trade receivables		30			(1	)		—			(1	)		28
Compensated absences		68			4			—			(2	)		70
Post sales client support		16			1			—			—			17
Credits related to branch profits		48			42			—			(1	)		89
Derivative financial instruments		(8	)		4			—			1			(3	)
Intangibles		4			2			—			—			6
Intangibles arising on business combinations		(50	)		8			—			1			(41	)
Branch profit tax		(68	)		(42	)		—			—			(110	)
SEZ reinvestment reserve		(84	)		(32	)		—			4			(112	)
Others		10			3			(2	)		—			11
Total Deferred income tax assets / (liabilities)		30			(20	)		(2	)		(1	)		7

The movement in gross deferred income tax assets / liabilities (before set off) for fiscal 2021 is as follows:

													(Dollars in millions)
	Carrying value as of April 1, 2020			Changes through profit and loss			Addition through business combination			Changes through OCI			Translation difference			Carrying value as of March 31, 2021
Deferred income tax assets / (liabilities)
Property, plant and equipment		32			2			—			—			1			35
Lease liabilities		18			4			—			—			1			23
Accrued compensation to employees		7			(1	)		—			—			—			6
Trade receivables		26			3			—			—			1			30
Compensated absences		57			9			—			—			2			68
Post sales client support		15			1			—			—			–			16
Credits related to branch profits		50			(1	)		—			—			(1	)		48
Derivative financial instruments		21			(28	)		—			(1	)		—			(8	)
Intangibles		3			1			—			—			—			4
Intangibles arising on business combinations		(56	)		10			(3	)		—			(1	)		(50	)
Branch profit tax		(73	)		5			—			—			—			(68	)
SEZ reinvestment reserve		(11	)		(72	)		—			—			(1	)		(84	)
Others		14			(5	)		—			—			1			10
Total Deferred income tax assets / (liabilities)		103			(72	)		(3	)		(1	)		3			30

The deferred income tax assets and liabilities is as follows:

	(Dollars in millions)
	As of
	March 31, 2023			March 31, 2022
Deferred income tax assets after set off	152			160
Deferred income tax liabilities after set off		(149	)		(153	)