Need to hike provision for deferred tax by Rs 211 cr, says Bajaj Auto

Bajaj Auto Ltd on Monday said it will need to increase its provision for deferred tax by Rs 211 crore due to the withdrawal of indexation benefit and change in the tax rate on long-term capital gains on debt mutual fund.

The company invests its surplus funds into a range of asset classes, including debt mutual funds. It was making accounting provisions for deferred tax as per applicable law on fair value gains on these investments, Bajaj Auto said in a regulatory filing.

A one-time impact will be made while computing the profit after tax, and reporting the financial results for Q2 of FY25, it added.

Bajaj Auto said the Finance (No 2) Act 2024 withdraws the indexation benefit on long-term capital gains on debt mutual funds purchased before 1 April 2023.

"Further, the tax rate with respect to long-term capital gains for the said asset class has been changed from 20 per cent plus surcharge and cess (with indexation) to 12.5 per cent plus surcharge and cess (without indexation)," it ..