Income Computation and Disclosure Standards (ICDS) (Section 145(2)), applicable from 1st April, 2016.

The CBDT notified 10 Income Computation and Disclosure Standards (ICDS) by notification number SO 892 (E) dated 31^st March, 2015. As per the notification ICDS are applicable from 1.04.2015 i.e. previous year 2015-16 (Assessment Year 2016-17).

After issuing the notification various representation were received by the CBDT which were examined by an expert committee.

Amendment and clarification in the notified ICDS are suggested by the committee.

Amendments and clarifications suggested by the committee are still under consideration. Audit report is also required to be revised by incorporating the disclosure mandate by ICDS.

CBDT decided that the ICDS shall be applicable from 1.04.2016 i.e. previous year 2016-17 (Assessment year 2017-18).

Press release, Dated 06 July 2016.

Income computation and disclosure standards (ICDS) will affect all taxpayers following the mercantile system of accounting for computing income chargeable to tax under the head of

      ·         Profits and gains of business or profession

      ·         Income from other sources

Features of ICDS

The provision of income tax Act would prevail in case of conflict between the provision of the Income tax Act 1961 and ICDS.

Applicability of ICSD

Applicable on all assesses following Mercantile System of Accounting and Chargeable to tax under the head of “Profit and gains of business and profession” and “Income from other sources”.

List of ICSD

ICDS I : Accounting Policies

ICDS II : Valuation of Inventories

ICDS III : Construction Contracts

ICDS IV : Revenue Recognition

ICDS V: Tangible Fixed Assets

ICDS VI: The Effect of Changes in Foreign Exchange Rates

ICDS VII: Government Grants

ICDS VIII: Securities

ICDS IX: Borrowing Cost

ICDS X: Provisions, Contingent Liabilities and Contingent Assets

Notification on ICSD, Dated 31^st March 2015.