GSK_ Annual_Report_2021-22

GlaxoSmithKline Pharmaceuticals Limited | Annual Report 2021-22 Notes to the Standalone Financial Statements for the year ended March 31, 2022 150 (c) Reconciliation of effective tax rate ( ` in lakhs) As at March 31, 2022 As at March 31, 2021 Profit before tax from continuing and discontinued operations 2481,61.99 549,73.62 Tax using the Company’s domestic tax rate at 25.168% on Normal Profit 213,77.96 137,89.43 Tax using the Company’s domestic tax rate in terms of Long Term Capital Gain at 22.88% 380,98.99 42.12 Total Tax 594,76.95 138,31.55 Tax effect of amounts which are not deductible / (taxable) in calculating taxable income: Corporate social responsibility expenditure 3,15.61 2,59.98 Impairment of assets 36.25 52,60.11 Physician Samples disallowed and added back in the computation 3,46.82 - Payment to Doctors (HCP Payment estimated Basis) 1,25.84 - Actual utilisation of Vemgal related cost - (1,77.00) Other items 14.35 42.22 Tax effect on account of earlier years: Current tax on account of earlier years (refer note (a) below) 187,93.59 - Total tax Expense 791,09.41 192,16.86 Consequent to the reconciliation items shown above, the effective tax rate is 31.88% (Financial Year 2020-21: 34.96%) a) Tax provision in respect of earlier years includes provisions (including interest) amounting to ` 202,00.00 lakhs towards possible disallowances of expenses incurred in prior years towards certain promotional spends which are under litigation with the authorities. (d) Movement in deferred tax balances ( ` in lakhs) Balance as at April 1, 2021 Recognised in the Statement of Profit and Loss Recognised in OCI Balance as at March 31, 2022 Deferred tax asset Provision for Employee Benefits 27,93.93 88.99 62.06 29,44.98 Voluntary retirement schemes 2,82.68 6,22.78 - 9,05.46 Allowance for doubtful debts 5,74.30 4.07 - 5,78.37 Interest on income tax refund not accounted but considered as taxable under the Income Tax Act,1961 16,30.54 - - 16,30.54 Expenses allowable for tax purpose when paid 64,42.56 6,65.04 - 71,07.60 Total Deferred tax asset 117,24.01 13,80.88 62.06 131,66.95 Deferred tax liabilities Fiscal allowance on Property, Plant and Equipment and Other Intangible assets (15,57.08) (3,31.49) - (18,88.57) Deferred tax asset (net) 101,66.93 10,49.39 62.06 112,78.38