INCOME COMPUTATION AND DISCLOSURE STANDARDS ICDS : FEATURES

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We are heading towards The new Income Tax Standards Popularly Known as Income Computation and Disclosure Standards ICDS . So we are providing you the Short Description of the same which is published in May 15 ICAI’s Student Jouranal which is written by Deputy Director, ICAI . so go through the complete Article and get some knowledge about Income Computation and Disclosure Standards.

In January, 2015, a revised set of twelve draft ICDSs were put up for public comments. After considering the comments of the stakeholders, the Central Government has, vide Notifi cation dated 31.3.2015, in exercise of the powers conferred under section 145(2), notifi ed ten income computation and disclosure standards (ICDSs) to be followed by all assessees, following the mercantile system of accounting, for the purposes of computation of income chargeable to income-tax under the head “Profi t and gains of business or profession” or “Income from other sources”. Th is notifi cation shall come into force with effect from 1st April, 2015, and shall accordingly apply to the A.Y. 2016-17 and subsequent assessment years.

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THE TEN NOTIFIED ICDS'S ARE:

ICDS I : Accounting Policies
ICDS II : Valuation of Inventories
ICDS III : Construction Contracts
ICDS IV : Revenue Recognition

ICDS V : Tangible Fixed Assets

ICDS VI : Th e Eff ects of Changes in Foreign Exchange Rates

ICDS VII : Government Grants

ICDS VIII : Securities

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(i)Applicability: All the notified ICDSs are applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of accounts. This is stated in the Preamble at the beginning of each ICDS .

(ii) Position in case of conflict with the Income tax Act, 1961: In the case of conflict between the provisions of the Income-tax Act, 1961 and the notified ICDSs, the provisions of the Act shall prevail to that extent. Th is is also stated in the Preamble at the beginning of each ICDS .

(iii) Scope Paragraph: Each of the ten notified ICDSs has a scope paragraph explaining what exactly the ICDS deals with. In some standards, the scope paragraph also specifies what the ICDS does not deal with.

(iv) Transitional Provisions: All ICDSs (except ICDS VIII on Securities) contain transitional provisions to facilitate first time adoption and prevent any tax leakage or any double taxation.

(v) Disclosure Requirements: All ICDSs (except ICDS VI on Effects of changes in foreign exchange rates and ICDS VIII on Securities) contain specific disclosure requirements. The last paragraph(s) of these ICDSs is on disclosure.

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Hope Now you got Some Idea of these standards and keep visiting our site for more and more updates.

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Regards

CA GROUPS

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