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The Tax Publishers Income Tax--ICDS New ICDS I Relating to Accounting Policies--An Overview Arundhati Kulshreshtha The learned author aims at making an overview of new Income Computation and Disclosure I relating to Accounting Policies as issued by the Central Government on 29-9-2016. 1. Power of Central Government to issue ICDSs Sub-section (2) of section 145 of the Act, as amended by the Finance Act, (No. 2) Act, 2015 empowers the Central Government to issue Income Computation and Disclosure Standards (ICDSs) to be followed by certain class of assessees and in respect of certain class of income. For this purpose, the Central Government vide Notification No. S.O. 892(E) dated 31-3-2015 had notified ten Income Computation and Disclosure Standards (ICDSs). It was provided that the ICDS would be applicable from the assessment year 2016-17 onwards. However, the applicability of ICDS was postponed to assessment year 2017-18 onwards. Now the Central Government vide Notification No. 86/2016, dt. 29-9-2016 has rescinded the Notification No. S.O. 892(E), dt. 31-3-2015. Thereafter, vide Notification No. 87/2016, dt. 29-9-2016, the Central Government has issued new set of ICDS to be applicable from assessment year 2017-18 onwards. 2. Applicability of ICDSs ICDSs are to be followed by all assessees (other than an individual or a Hindu undivided family who is not required to get his accounts of the previous year audited in accordance with the provisions of section 44AB of the said Act) following the mercantile system of accounting, for the purposes of computation of income chargeable to income-tax under the head Profits and gains of business or profession or Income from other sources. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Income Tax--ICDS

New ICDS I Relating to Accounting Policies--An Overview

Arundhati Kulshreshtha

The learned author aims at making an overview of new Income Computation and Disclosure I relating to Accounting Policies as issued by the Central Government on 29-9-2016.

1. Power of Central Government to issue ICDSs

Sub-section (2) of section 145 of the Act, as amended by the Finance Act, (No. 2) Act, 2015 empowers the Central Government to issue Income Computation and Disclosure Standards (ICDSs) to be followed by certain class of assessees and in respect of certain class of income. For this purpose, the Central Government vide Notification No. S.O. 892(E) dated 31-3-2015 had notified ten Income Computation and Disclosure Standards (ICDSs). It was provided that the ICDS would be applicable from the assessment year 2016-17 onwards. However, the applicability of ICDS was postponed to assessment year 2017-18 onwards. Now the Central Government vide Notification No. 86/2016, dt. 29-9-2016 has rescinded the Notification No. S.O. 892(E), dt. 31-3-2015. Thereafter, vide Notification No. 87/2016, dt. 29-9-2016, the Central Government has issued new set of ICDS to be applicable from assessment year 2017-18 onwards.

2. Applicability of ICDSs

ICDSs are to be followed by all assessees (other than an individual or a Hindu undivided family who is not required to get his accounts of the previous year audited in accordance with the provisions of section 44AB of the said Act) following the mercantile system of accounting, for the purposes of computation of income chargeable to income-tax under the head Profits and gains of business or profession or Income from other sources.