NOTE 18 - INCOME TAXES

12 Months Ended

Mar. 31, 2013

NOTE 18 – INCOME TAXES

Income tax expense (benefit) for each of the years ended March 31 consists of the following:

	March 31,
	2013			2012

Current:
Federal	$	-		$	-
Foreign		157,382			(691,125	)
State		-			-
Net Current		157,382			(691,125	)

Deferred:
Federal		-			-
Foreign		(522,498	)		863,953
State		-			-
Net Deferred		(522,498	)		863,953
Total tax provision	$	(365,116	)	$	172,828

The significant components of deferred income tax expense (benefit) from operations before non-controlling interest for each of the years ended March 31 consist of the following:

	March 31,
	2013			2012
Deferred tax expense (benefit)	$	(522,498	)	$	172,828
Net operating loss carry forward		891,816			2,717,569
Foreign Tax Credits
Less: Valuation Allowance		891,816			2,717,569
Net deferred tax expense	$	(522,498	)	$	172,828

The table below sets forth income tax expense (benefit) for 2013 and 2012 computed by applying the applicable United States federal income tax rate and is reconciled to the tax expense (benefit) computed at the effective income tax rate:

	March 31,
	2013			2012
Computed expected income tax (benefit)		(768,709	)		(2,633,955	)
State tax benefit net of federal tax					421,820
Change in valuation allowance		768,709			(923,973	)
Deferred expenses from foreign acquisition					283,900
Impairment loss on goodwill					406,047
Impairment loss on investments					2,553,938
Capitalized interest costs					(275855	)
Deferred Tax Assets from foreign subsidiaries		(365,116	)
Other					(4,751	)

Effective income tax rate		(15.2	)%		2.2	%

The deferred tax assets and liabilities as of March 31 consist of the following tax effects relating to temporary differences and carry forwards:

	March 31,
	2013			2012
Current deferred tax liabilities (assets):
Deferred Acquisition Costs – Foreign taxes	$	221,700		$	135,980
Valuation allowance		0			0
Net current deferred tax liabilities (assets)		221,700			135,980

Noncurrent deferred tax (assets) liabilities:
Deferred Acquisition Costs- Foreign taxes		(563,155	)		727,973
Net Operating Losses		891,816			2,717,569
Valuation allowance		(891,816	)		(2,717,569	)
Non-Current net deferred tax (assets) liabilities	$	(563,155	)	$	727,973

Deferred income tax assets, net of valuation allowances are expected to be realized through future taxable income. The valuation allowance increased in 2013 by $892 thousand, primarily related to 2013 US net-operating losses. We do expect the foreign deferred tax credits to be utilized. Therefore, those assets remain without a valuation allowance. The company intends to maintain valuation allowances for deferred tax assets (except a previously mentioned) until there is sufficient evidence to support the reversal of the valuation allowance. Deferred tax liabilities ($877.8 thousand) appeared on the acquired company’s books at the date of acquisition for fiscal year end 2012. Those deferred assets were removed during 2013 after making post acquisition corrections.

The Company's and/or its subsidiaries’ ability to utilize their net operating loss carry forwards may be significantly limited by Section 382 of the Internal Revenue Code of 1986, as amended, if the Company or any of its subsidiaries undergoes an “ownership change” as a result of changes in the ownership of the Company's or its subsidiaries’ outstanding stock pursuant to the exercise of the warrants or otherwise. A corporation generally undergoes an “ownership change” when the ownership of its stock, by value, changes by more than 50 percentage points over any three-year testing period. In the event of an ownership change, Section 382 imposes an annual limitation on the amount of post-ownership change taxable income a corporation may offset with pre-ownership change net operating loss carry forwards and certain recognized built-in losses. As of March 31, 2013 IGC could not use its’ net operating losses because it is more likely it will not utilize net operating losses in the foreseeable future.

- 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.

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