IDBI Bank creates Special Reserve through appropriations of profits, in order to avail tax deductions as per Section 36(1)(Viii) of the Income Tax Act, 1961. The Reserve Bank of India (RBI), through its circular dated 20 December 2013, had advised banks to create deferred tax liability (DTL) on the amount outstanding in Special Reserve, as a matter of prudence. In accordance with these RBI guidelines, during the three months ended 31 December 2013, the bank created DTL of Rs 279.96 crore on Special Reserve outstanding at 31 March 2013, by reducing the reserves. Had this amount been charged to the profit & loss account in accordance with the generally accepted accounting principles in India, the amount of profit for the year would have been lower by such amount, IDBI Bank said.