Income computation and disclosure standards

Now that MCA has made Indian Accounting Standards(IndAS) applicable, it will impact in the preparation and presentation of financial Statements. The main focus of IndAS is to provide clarity of presentation in financial statements to investors. But In order to harmonize with the provision of the IndAS for computation of income to be chargeable under the head Profit and gains of business or profession” or “ Income from other sources” ICDS has been brought into the picture. 

Key Features of ICDS:

1. Effective Date of ICDS is 01st April, 2015 i.e. FY:2015-16 & AY: 2016-17.
2. ICDS applicable to all Assesses i.e. Corporate & Non Corporate Assesses.
3. No Net Worth or Turnover Criteria Prescribed for applicability.
4. Entity need not maintain Books of accounts for ICDS. ICDS is only for computation of income under the head “Profit and gains of business or profession” or “Income from other sources”.
5. ICDS is meant for normal computation of income not for Minimum Alternate Tax(MAT) Calculation.
6. In the case of conflict between the provisions of the Income‐tax Act, 1961 and Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.