NOTE 20 – INCOME TAXES

The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduces the maximum U.S. federal corporate tax rate from 35% to 21%, allows net operating losses incurred in 2018 and beyond to be carried forward indefinitely, allows alternative minimum tax carryforwards to be partially refunded, beginning in 2018, and fully refunded by 2021, and creates new taxes on certain foreign sourced earnings.

At September 30, 2021, the Company had approximately $37,099,262 of federal and $13,726,364 of state net operating losses. The net operating loss carryforwards, if not utilized, will begin to expire in 2036 for federal purposes and in 2036 for state purposes.  The company is currently reviewing net operating losses for Section 382 limitation purposes and will make any required adjustments to the net operating losses at the completion of the study.

The following is a geographical breakdown of loss before the provision for income taxes:

Cemtrex Inc. and Subsidiaries

The provision for income taxes consisted of the following:

The following is a reconciliation of the effective income tax rate to the federal and state statutory rates:

Cemtrex Inc. and Subsidiaries

The components of our deferred tax assets and liabilities are summarized as follows: