INCOME TAXES

12 Months Ended

Mar. 31, 2011

INCOME TAXES

NOTE 10 - INCOME TAXES

China YCT International, Inc. is a holding company of Shandong Spring Pharmaceutical Co., Ltd and does not have any operating activities. Although the contract of the acquisition of the US patent was executed by the holding company, in substance, the patent was acquired and is used by the Company’s operating entity in China. For the same reason, the amortization of the patent was a deduction to the Chinese operating entity’s tax liability. Therefore, the Company does not incur any US income tax liabilities.

Shandong Spring Pharmaceutical Co., Ltd is subject to the Enterprise income tax (“EIT”) at a statutory rate of 25%. For the years ended March 31, 2011 and 2010, Shandong Spring Pharmaceutical Co., Ltd. recorded Chinese income tax provisions of $3,410,265 and $3,216,742, respectively.