Income Computation & Disclosure Standards (ICDS)

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  • Section 145 of Income Tax Act provides that taxable income of assesse who is following mercantile system of accounting shall be computed by ICDS.
  • ICDS applicable for computing income under the head Profits and Gain from Business and Profession and other income.
  • Both Corporate and Non-Corporate Assesses are covered under ICDS.
  • There is no need to maintain separate books of account to follow ICDS.
  • ICDS to be followed by all assesses whether residents and non residents.
  • The Central Government on 31 March, 2015 has notified 10 ICDS to be complied by assesses.

Following are the ICDS which has been notified by the Central Govt. till date:

  1. Disclosure of Accounting Policies – ICDS I
  2. Valuation of Inventories –ICDS II
  3. Construction Contract-ICDS III
  4. Revenue Recognition-ICDS IV
  5. Tangible Fixed Assets-ICDS V
  6. Effect of change in Foreign Exchange Rates-ICDS VI
  7. Government Grants-ICDS VII
  8. Tangible Fixed Assets-ICDS VIII
  9. Borrowing Cost-ICDS
  10. Provisions, Contingent Liabilities and Contingent Assets.

The Income Tax Department shall get information of the Assessee to the fullest but for an Assesse the implementation is not so easy

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