CBDT had notified ICDS or Income Computation and Disclosure Standards (ICDS). These tax accounting standards were applicable from 1st April 2015. Every business reporting income under the head ‘Profits and Gains of Business & Profession’ must mandatorily comply with these. These standards laid down the manner in which business income shall be computed.
As various AS or accounting standard were notified under ICDS, the income tax department received representations and suggestions on them from taxpayers.
The tax department is reviewing these suggestions and also planning to incorporate some disclosures into the tax audit report form to ensure compliance.
- Therefore, CBDT has postponed the applicability of ICDS from 1st April 2015 to 1st April 2016.
- ICDS does not apply for your return filing and tax audits for FY 2015-16(AY 2016-17).
- ICDS is applicable from 1st April 2016 accounting and tax filings for FY 2016-17(AY 2017-18)
If you have any questions, do comment and ask 🙂