What is the intention of ICDS
is the abstract of AS?
The Central Government (CG) recently notified 10 Income Tax Computation & Disclosure Standards (ICDS) effective financial year 2015–16. This will affect the compliance practice of all taxpayers following the mercantile system of accounting for computing income chargeable to income tax under the heads:
- Profits and gains of business or profession or
- Income from other sources
The introduction of ICDS will help bring increased consistency in computation and reporting of taxable income, reduce litigation and minimize the alternatives provided by the existing Accounting Standards issued by the Institute of Chartered Accountants of India.
Given that this is the first year of applicability, there could be transitional concerns on income computation, as well as disclosure under the ICDS vis-à-vis current established practices. Differences in the two practices could have significant cash and tax impact (including risk of a Best Judgement assessment in case of non-compliance). It is critical for all stakeholders to understand the applicability of new tax standards and its various practical application issues
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