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Since the beginning of the green revolution in the 1970s, large areas of India have been strongly dependent on groundwater for irrigation which has led to aquifer overexploitation in various parts of the country. To tackle this problem, Indian authorities rely on managed aquifer recharge (MAR). Perennial water resources in semi-arid regions of South India consist mostly of crystalline aquifers. Despite limited and only local storage capacity and high potential evaporation loss, MAR is promoted through percolation tanks. To assess the efficiency of MAR, a monitoring program and a water balance were developed for a percolation tank in Andhra Pradesh, India. The developed water balance shows that the tank has a limited local impact and only a few events contribute to tank replenishment. Enhanced infiltration (10,100 m(3)) is of the same order of magnitude as evaporation (8,000 m(3)). Potential benefits of the tank system depend on the observation scale and rainfall conditions. Generally, tanks have a local positive impact in their immediate surroundings. However, in the case of low rainfall, if there is no stream water flowing out of the watershed, the tank merely redistributes the water within the watershed. Inversely, during years with high precipitation, there may be a net benefit in terms of underground storage. Regarding the hydrological impact assessment of percolation tanks, it is necessary to take into account (1) the net "nonmanaged" water balance at watershed scale compared to "managed" water balance, (2) the inter-annual rainfall variations and (3) the impact for downstream users.