SS Innovations International, Inc. Income Taxes Disclosure

NOTE 17 – INCOME TAX 

 

The Company has not recorded income tax benefits for the net operating losses incurred during the years ended December 31, 2024, and 2023 nor for other deferred tax assets generated, due to its uncertainty of realizing a benefit from those items.

 

The components of income/(loss) before income taxes consist of the following:

 

		Year ended December 31,
		2024				2023
Domestic			(17,924,310	)			(16,672,162	)
Foreign			(1,226,887	)			(4,206,130	)
Total			(19,151,197	)			(20,878,292	)

 

The Company has federal and state net operating losses as of December 31, 2024, and 2023.

 

The Company has not recorded any amounts for unrecognized tax benefits as of December 31, 2024, and 2023. The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense. The Company had no accrual of interest and penalties on the Company’s balance sheets and has not recognized interest and penalties in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2024, and 2023. 

 

The Company is subject to taxation in the United States and India. The Company’s tax returns filed has no pending examinations in India and US.

The effective income tax rate differs from the amount computed by applying the income tax rate of India to Income/(Loss) before income taxes approximately as follows:

 

		Year ended December 31,
		2024				2023
Accounting income / (loss) before income tax			(19,151,197	)			(20,878,292	)
Income tax expense (benefit) at federal statutory rate at 21%			(4,021,752	)			(4,384,441	)
Foreign tax rate differential			(798,222	)			(1,078,990	)
Non-deductible expenses			245,753				(23,494	)
Excess tax benefit / (expense) on depreciation			(66,770	)			18,621
Excess tax expense on security deposit			286				10,826
Impact of unrecognized deferred tax asset on the loss of the year			4,640,705				5,457,478
Income tax expense/(benefit)			-				-

 

The Company recorded nil income tax expense for the years ended December 31, 2024, and 2023 due to losses in current year and prior year and it does not expect to recover the tax benefit on the losses incurred during the years ended December 31, 2024, and 2023.

 

The components of the deferred tax balances were as follows:

 

		December 31, 2024				December 31, 2023
Deferred tax assets:
Net operating loss carry forwards			5,123,862				763,591
Net operating loss			3,842,483				4,360,270
Lease payments			28,299				18,976
Credit loss reserve			198,703				-
Others			44,204				23,754
			9,237,551				5,166,591
Valuation allowance			(9,150,495	)			(5,145,040	)
Deferred tax assets			87,056				21,551
Deferred tax liabilities:
Depreciation and amortization			74,285				16,763
Others			12,771				4,788
Deferred tax liabilities			87,056				21,551
Net deferred tax assets/liability			-				-

 

Deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statement carrying values of assets and liabilities and their respective tax bases and operating loss carry forwards. The Company performed an analysis of the realizability of deferred tax assets as of December 31, 2024, and 2023 and recorded a valuation allowance of $9,150,495 and $5,145,040 respectively.