PROVISION FOR INCOME TAXES

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

PROVISION FOR INCOME TAXES

NOTE 19: PROVISION FOR INCOME TAXES

The provision (benefit) for income taxes for the years ended December 31, 2022 and 2021 differs from the amount which would be expected as a result of applying the statutory tax rates to the losses before income taxes due primarily to the valuation allowance to fully reserve net deferred tax assets.

All United States based entities:

The following table summarizes the significant differences between the U.S. Federal statutory tax rate and the Company’s effective tax rate for financial statement purposes for the years ended December 31, 2022 and 2021:

	2022			2021
Federal income taxes at statutory rate		21.00	%		21.00	%
State income taxes at statutory rate		(3.68	)%		7.50	%
Temporary differences		(4.00	)%		8.92	%
Permanent differences		(2.23	)%		(5.24	)%
Change in valuation allowance		(11.09	)%		(32.18	)%
Totals		0.00	%		0.00	%

Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carry-forwards are expected to be available to reduce taxable income. As the achievement of required future taxable income is uncertain, the Company recorded a valuation allowance.

		As of			As of
		December 31, 2022			December 31, 2021
Deferred tax assets:
Net operating losses before non-deductible items	$		3,449,673		$	1,949,739
Stock-based compensation			376,733			683,299
Other			3,923			-
Depreciation			(65,064	)		-
Total deferred tax assets			3,765,265			2,633,038
Less: Valuation allowance			(3,765,265	)		(2,633,038	)
Net deferred tax assets		$	-		$	-

As of December 31, 2022, the Company has a net operating loss carry forward of $15,504,989 expiring through 2037. The Company has provided a valuation allowance against the full amount of the deferred tax asset due to management’s uncertainty about its realization. Furthermore, the net operating loss carry forward may be subject to further limitation pursuant to Section 382 of the Internal Revenue Code. The valuation allowance was increased by $1,132,227 in 2022.

The Company classifies income tax penalties and interest, if any, as part of other general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss. The Company did not expense any penalties or interest during the years ended December 31, 2022 or 2021 and did not accrue any penalties or interest as of December 31, 2022 or 2021.

India based entity:

Significant components of deferred tax liabilities as of December 31, 2022 and 2021:

		As of December 31, 2022		As of December 31, 2021
Deferred Tax Assets:
Difference between book and tax base of fixed assets	$		-	$	32,370
Provision for gratuity			-		26,286
Provision for leave encashment			-		10,429
Operating lease			-		47,026
NOL carryforward (based on last tax return filed per Indian Income Tax laws)			-		-
Timing difference on TDS under 40a(ia)			-		-
MAT credit			-		-
Deferred Tax Assets			-		116,111
Net Deferred Tax Assets			-		116,111
Less: Valuation allowance			-		(-	)
Net Deferred Tax Asset	$		-	$	116,111

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.

On December 30, 2022, the Company entered into an assignment of stock agreement for all of the India based entities. Accordingly, the deferred tax assets were included in the transfer and no longer included in the consolidated financial statements.