Effect of icds 2 on tax liability

Asma (Article) (61 Points)

26 September 2017  

Hello!!

I have a query based on ICDS 2, I am clear about provisions but my basic doubt is about whether the Effect of ICDS (i,e. Increase in the value of stock) will be added to the Business  profit in calculating the Tax Liability??? OR such increase in stock is only for Disclosure purpose.

For Example:(Partnership Concern)

If my stock value increased by 1 lakh as effect of ICDS. & My current profit is 3 lakhs. For computation of Income Tax whether i need to add 1 lakh to my profits for calculation of Tax Liability. OR I pay tax on 3 lakhs and show 1 lakh as disclosure.