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Taxes | 12 Months Ended
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Mar. 31, 2020
Income Tax Disclosure [Abstract] |
TAXES | NOTE 8 – TAXES Corporate Income Taxes ("CIT") The Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which each entity is domiciled. Wah Fu is an offshore holding company and is not subject to tax on income or capital gains under the laws of the British Virgin Islands. Wah Fu Holding was incorporated in Hong Kong and is subject to Hong Kong corporate income tax at a rate of 8.25% on assessable profits up to HK$2,000,000 and 16.5% on any part of assessable profits over HK$2,000,000. Distance Learning was registered in the PRC and is subject to corporate income tax at a reduced rate of 15% starting from 2014, when it was approved by local government as a High-technology Company. The certificate of High-technology Company will expire in December 2020. Hunan Huafu, Shanghai Xia Shu, Shanghai Xin Fu, Nanjing Suyun, Guizhou Huafu, Fuzhou Huafu , Laoning Huafu, Guangxi Huafu, Sichuan Huafu and Guangzhou Huafu were registered in the PRC and are subject to corporate income tax at a reduced rate of 10% starting from the inception dates when they were approved by local government as small-scaled minimal profit enterprises. Huaxia MOOC was subject to coporate income tax at a reduced rate of 10% from the inception date till the end of 2019. The income tax rate increased to 25% since 2020. Digital Information was registered in the PRC and is subject to corporate income tax at the rate of 25%. Per share effect of the tax savings were $0.06 for the year ended March 31, 2018. (i) The components of the income tax expense (benefit) are as follows:
|  | For the Year Ended |
|  | March 31, 2020 |  |  | March 31, 2019 |  |  | March 31, 2018 |
Current income tax provision |  | $ | 100,741 |  |  | $ | 9,627 |  |  | $ | 247,862 |
Deferred income tax provision (benefit) |  |  | 111,757 |  |  |  | (106,431 | ) |  |  | (155,839 | )
Total |  | $ | 212,498 |  |  | $ | (96,804 | ) |  | $ | 92,023 |
(ii) The following table summarizes deferred tax assets resulting from differences between the financial reporting basis and tax basis of assets and liabilities:
|  | As of March 31, 2020 |  |  | As of March 31, 2019 |
Allowance for doubtful accounts |  | $ | 113,062 |  |  | $ | 129,742 |
Deferred revenue |  |  | 219,177 |  |  |  | 83,876 |
Net operating loss carry-forwards |  |  | 465,059 |  |  |  | 402,876 |
Total deferred tax asset |  |  | 797,298 |  |  |  | 616,494 |
Valuation allowance |  |  | (525,183 | ) |  |  | (213,028 | )
Deferred tax assets, net |  | $ | 272,115 |  |  | $ | 403,466 |
According to Chinese tax regulations, net operating loss ("NOL") can be carried forward to offset operating income for five years. A valuation allowance is established for deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize their benefits, or that the realization of future deductions is uncertain. Management performs an assessment over future taxable income to analyze whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. As of March 31, 2020 and March 31, 2019, valuation allowance accrued for deferred tax assets was $525,183 and $213,028, respectively. (iii) The following table reconciles the PRC statutory rates to the Company's effective tax rate for the years ended March 31, 2020, 2019 and 2018:
|  | For the Years Ended |
|  | March 31, 2020 |  |  | March 31, 2019 |  |  | March 31, 2018 |
Statutory PRC income tax rate |  |  | 25 | % |  |  | 25 | % |  |  | 25.0 | %
Favorable tax rate impact (a) |  |  | (6.3 | )% |  |  | (11.1 | )% |  |  | (15.3 | )%
Permanent difference |  |  | (4.6 | )% |  |  | (1.6 | )% |  |  | (2.8 | )%
Change in valuation allowance |  |  | (29.0 | )% |  |  | (3.6 | )% |  |  | 0.2 | %
Effective tax rate |  |  | (14.9 | )% |  |  | 8.7 | % |  |  | 7.1 | %
| (a) | Distance Learning is subject to a favorable tax rate of 15%; Shanghai Xia Shu, Shanghai Xin Fu, Hunan Huafu, Nanjing Suyun, Guizhou Huafu, Fuzhou Huafu, Liaoning Huafu and Huafu Silu are subject to a favorable tax rate of 10%.
Taxes payable Taxes payable consisted of the following:
|  | As of March 31, 2020 |  |  | As of March 31, 2019 |
Income tax payable |  | $ | 274,296 |  |  | $ | 285,821 |
Value added tax payable |  |  | 26,239 |  |  |  | 24,585 |
Other taxes payable |  |  | 13,517 |  |  |  | 8,279 |
Total |  | $ | 314,052 |  |  | $ | 318,685 |

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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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