Income Computation and Disclosure Standards – A Perspective

September 2017

The Income Computation and Disclosure Standards (ICDS), a new framework for computation of taxable income is effective from fiscal year 2016-17. The 10 ICDS notified so far, provide the tax treatment of transactions and events, disclosure requirements and transitional provisions. The compliance with ICDS will be captured in Tax Audit Report and Income Tax Return Forms of taxpayers.

While certainty and reducing of tax disputes may be the intention behind ICDS, the analysis and implementation thereof throws numerous challenges in terms of unsettling of taxation principles and interpretations laid down by the judiciary, multiplicity of records considering divergence with Accounting Standards (AS) followed for financial statements, etc.

In this publication, we have summarised the notified ICDS and highlighted key differences between ICDS and AS. This also contains summary of key issues and points for consideration by taxpayers alongwith possible approaches and views. We hope this publication will be a useful guide to you in implementation of ICDS.

Read BDO India’s analysis of the ICDS, in our proprietary publication.