Perfect Moment Ltd. Income Taxes Disclosure

13. INCOME TAXES

 

Components of income tax (benefit) expense were as follows:

 SCHEDULE OF INCOME TAX BENEFIT EXPENSE 

		Year Ended March 31, 2026				Year Ended March 31, 2025
Current		$	-			$	-
Deferred			-				-
Total income tax (benefit) expense		$	-			$	-

 

The following is a reconciliation of the federal statutory rate to the Company’s effective income tax rate:

 SCHEDULE OF RECONCILIATION OF INCOME TAXES 

		Year Ended March 31, 2026				Year Ended March 31, 2025
		Year Ended March 31, 2026				Year Ended March 31, 2025
Statutory rate			21.0	%			21.0	%
Change in valuation allowance			(21.0	)			(21.1	)
Foreign tax differential			0.0				(1.2	)
Permanent differences			0.0				1.3
Effective rate			0.0	%			0.0	%

 

 

The tax effects of temporary cumulative differences which give rise to deferred tax assets and liabilities are summarized as follows:

 SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 

		March 31, 2026				March 31, 2025
Deferred tax liabilities:
Related Party Interest		$	154			$	-
Gain/Loss on Currency			37				-
Fixed and intangible assets			(50	)			175
Total deferred tax liabilities			141				175
Deferred tax assets:
Tax loss carryforward			11,511				10,284
Stock compensation expense			446				815
IPO expenses			-				163
Interest Expense			5				-
Valuation allowance			(11,821	)			(11,087	)
Total deferred tax assets			141				175
Deferred tax assets, net		$	-			$	-

 

During the years ended March 31, 2026 and 2025, the Company recorded an increase in the valuation allowance of $734 and $3,190, respectively, related to federal deferred tax assets. Deferred tax assets are recorded related to net operating losses and temporary differences between the book and tax bases of assets and liabilities expected to produce tax deductions in future periods. The realization of these assets depends on recognition of sufficient future taxable income in specific tax jurisdictions in which those temporary differences or net operating losses are deductible.

 

Throughout the year ended March 31, 2026, the Company has been assessing the realizability of its deferred tax assets by considering positive factors such as the next three years’ profit projection making it more likely than not that the Company will be able to recognize a deferred tax asset on losses. Based upon historical performance of the Company, a valuation allowance of 100% was recorded as there is currently no significant evidence to indicate realizability of deferred tax assets. During the years ended March 31, 2026 and 2025, the Company recorded a valuation allowance of 100% and 100% of UK and Hong Kong losses.

 

The Company is subject to US federal income tax, as well as income tax in multiple US state and local jurisdictions and a number of foreign jurisdictions. Returns for the years since fiscal year 2022 are still open based on statutes of limitation only.