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Income taxes | 12 Months Ended
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Mar. 31, 2021
Income taxes | 20 . Income taxes Income tax expense is comprised of the following:
|  | Fiscal year ended March 31, |
|  | 2019 |  |  | 2020 |  |  | 2021 |  |  | 2021 |
|  | (In millions) |
Current tax expense |  |  | Rs.128,050.2 |  |  |  | Rs.105,587.8 |  |  |  | Rs.122,087.4 |  |  | US$ | 1,669.1 |
Deferred tax (benefit) expense |  |  | (8,129.4 | ) |  |  | (101.2 | ) |  |  | (8,267.3 | ) |  |  | (112.9 | )
Interest on income tax refund |  |  | (527.3 | ) |  |  | (6.6 | ) |  |  | — |  |  |  | — |
Income tax expense |  |  | Rs.119,393.5 |  |  |  | Rs.105,480.0 |  |  |  | Rs.113,820.1 |  |  | US$ | 1,556.2 |
Income tax expense (benefit) as at March 31, 2021 was recorded (i) in retained earnings for the tax effect of ASU 2016-13 for current expected credit losses (CECL) Rs. (21,016.0) million, (ii) in other comprehensive income Rs. (8,457.8) million. Income before income tax expense and income tax expense are substantially all from India. On December 12, 2019, the India Taxation Laws (Amendment) Act, 2019, was promulgated, which provided domestic companies with an option to pay income tax at the rate of 22 percent (previously 30 percent), provided they do not claim certain deductions under the Income Tax Act with effect from the financial year 2019-20 . The bank elected to be subject to the 22 percent rate (25.17% including surcharge and education cess).The Bank has accounted for the effect of this change in the income tax rate during the year ended March 31, 2020 using reasonable estimates based on information available at the time and its interpretations of the law thereof, effective from financial year 2019-20. The following is a reconciliation of income taxes at the Indian statutory income tax rate to income tax expense as reported:
|  | Fiscal year ended March 31, |
|  | 2019 |  |  | 2020 |  |  | 2021 |  |  | 2021 |
|  | (In millions) |
Income before income tax expense |  |  | Rs.339,959.0 |  |  |  | Rs.365,844.0 |  |  |  | Rs.439,826.5 |  |  | US$ | 6,013.6 |
Statutory income tax rate |  |  | 34.94 | % |  |  | 25.17 | % |  |  | 25.17 | % |  |  | 25.17 | %
Expected income tax expense |  |  | 118,795.3 |  |  |  | 92,075.6 |  |  |  | 110,695.5 |  |  |  | 1,513.5 |
Adjustments to reconcile expected income tax to actual tax expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest on income tax refund |  |  | (343.0 | ) |  |  | (4.9 | ) |  |  | — |  |  |  | — |
Stock based compensation |  |  | 1,867.2 |  |  |  | 1,881.6 |  |  |  | 2,668.7 |  |  |  | 36.5 |
Income exempt from taxes |  |  | (1,422.8 | ) |  |  | (744.2 | ) |  |  | (62.3 | ) |  |  | (0.9 | )
Effect of change in statutory income tax rate |  |  | — |  |  |  | 11,213.2 |  |  |  | — |  |  |  | — |
Others, net |  |  | 496.8 |  |  |  | 1,058.7 |  |  |  | 518.2 |  |  |  | 7.1 |
Income tax expense |  |  | Rs.119,393.5 |  |  |  | Rs.105,480.0 |  |  |  | Rs.113,820.1 |  |  | US$ | 1,556.2 |
The tax effects of significant temporary differences are as follows:
|  | As of March 31, |
|  | 2020 |  |  | 2021 |  |  | 2021 |
|  | (In millions) |
Tax effect of: |  |  |  |  |  |  |  |  |  |  |  |
Deductible temporary differences: |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan losses |  |  | Rs.37,561.2 |  |  |  | Rs.67,584.1 |  |  | US$ | 924.0 |
Lease liabilities |  |  | 16,514.0 |  |  |  | 17,723.8 |  |  |  | 242.3 |
Employee benefits |  |  | 1,415.0 |  |  |  | 752.3 |  |  |  | 10.3 |
Accrued expenses and other liabilities |  |  | 3,381.2 |  |  |  | 4,997.1 |  |  |  | 68.3 |
Others |  |  | 1,769.4 |  |  |  | 1,904.4 |  |  |  | 26.1 |
Deferred tax asset |  |  | 60,640.8 |  |  |  | 92,961.7 |  |  |  | 1,271.0 |
Taxable temporary differences: |  |  |  |  |  |  |  |  |  |  |  |
Right-of-use assets |  |  | 16,514.0 |  |  |  | 17,723.8 |  |  |  | 242.3 |
Investments available for sale debt securities |  |  | 16,644.6 |  |  |  | 8,567.9 |  |  |  | 117.1 |
Loan origination cost and fees |  |  | 3,373.3 |  |  |  | 3,456.0 |  |  |  | 47.3 |
Investments, others |  |  | 1,510.2 |  |  |  | 2,874.2 |  |  |  | 39.3 |
Deferred tax liability |  |  | 38,042.1 |  |  |  | 32,621.9 |  |  |  | 446.0 |
Net deferred tax asset (liability) |  |  | Rs.22,598.7 |  |  |  | Rs.60,339.8 |  |  | US$ | 825.0 |
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 pretax income. The total unrecognized tax benefit as of March 31, 2020 and March 31, 2021 is Rs. 37,103.2 million and Rs. 43,048.0 million, respectively. The major income tax jurisdiction for the Bank is India. The open tax years (first assessment by the tax authorities) is pending from fiscal 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, |
|  | 2020 |  |  | 2021 |  |  | 2021 |
|  | (In millions) |
Opening balance |  | Rs. | 14,448.1 |  |  | Rs. | 37,103.2 |  |  | US$ | 507.3 |
Decrease related to prior year tax positions |  |  | — |  |  |  | (221.5 | ) |  |  | (3.0 | )
Increase related to prior year tax positions |  |  | 16,274.4 |  |  |  | 892.8 |  |  |  | 12.2 |
Increase related to current year tax positions |  | Rs. | 6,380.7 |  |  | Rs. | 5,273.5 |  |  | US$ | 72.1 |
Closing balanc e |  | Rs. | 37,103.2 |  |  | Rs. | 43,048.0 |  |  | US$ | 588.6 |
The Bank’s total unrecognized tax benefits, if recognized, would reduce the income tax expense by Rs. 37,103.2 million and Rs. 43,048.0 million as of March 31, 2020 and March 31, 2021, respectively, and thereby would affect the Bank’s effective tax rate. Unrecognized tax benefits are 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.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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