The Direct Tax Committee of the Institute of Chartered Accountants of India (ICAI) has recently published a “Technical Guide on Income Computation and Disclosure Standards (ICDS) – First Edition July, 2017”.
The Central Government last year notified 10 Income Computation and Disclosure Standards (ICDS) for the purpose of computation of taxable income by certain Assessees. It provides for a new framework for computation of taxable income by all assessees (other than individual or a HUF who is not required to get his accounts of the previous year audited in accordance with the provisions of Section 44AB of the Income-tax Act, 1961) following the mercantile system of accounting for the purpose of computation of income under the heads “Profits and gains of business or profession” or “Income from other sources”.
The accounting standards, which came into effect from April 2016 (assessment year 2017-18), aims at ensuring consistency and help minimise tax-related disputes.
The technical guide, issued by the ICAI is an effort has been made by the ICAI to gear up the members of our fraternity for implementation of ICDSs and to guide the stakeholders about the significant changes and impact which will take place in computation of taxable income. Reference to Indian Accounting Standards (Ind-AS) and Accounting Standards (AS), to the extent as considered necessary has been made at many places in this technical guide. Also, this publication will assist the members to remove the ambiguity and guide them in implementation of the ICDSs in a more effective manner.
