CBDT’s 25 FAQs for Clarifications on Revised ICDS (1 to 10)
The CBDT has issued Clarifications by way of 25 Nos. FAQs on it’s ‘Revised Income Computation and Disclosure Standards (ICDS 1~10)’ notified earlier u/s 145(2) of the Income-tax Act, 1961, based on reference received from stakeholders in respect of certain provisions of ICDS, as under:
Sub-section (1) of section 145 of the Income-tax Act, 1961 (‘the Act’) provides that the income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” shall, subject to the provisions of sub-section (2), be computed in accordance with either cash or mercantile system of accounting regularly employed by the assessee. Sub-section (2) of section 145 provides that the Central Government may notify Income Computation and Disclosure Standards (ICDS) for any class of assessees or for any class of income. Accordingly, the Central Government notified 10 ICDS vide Notification No.S.O.892(E) dated 31st March, 2015 with effect from assessment year 2016-17.
After notification of ICDS, it has been brought to the notice of the Central Board of Direct Taxes (‘the Board’) by the stakeholders that certain provisions of ICDS may require amendment/ clarification for proper implementation. The matter was referred to an expert committee. The Committee after duly consulting the stakeholders in this regard has
recommended a two-fold approach for the smooth implementation of ICDS, i.e. amendment to the provisions of ICDS in respect of certain issues and issuance of clarifications by way of FAQs for the rest of issues. Accordingly, vide Notification No. 87 dated 29th September,2016 Central Government notified amended ICDS with effect from the assessment year 2017-18.
Further, the issues which require further clarification has been considered by Board and following clarifications are issued: …. contd…. (please refer attachment)