Income Computation and Disclosure Standards – A Perspective

We are delighted to present an updated version of our proprietary publication on Income Computation and Disclosure Standards (ICDS).

The new framework for computation of taxable income i.e. ICDS introduced in September 2016 has been subject matter of judicial review and debate. The controversial aspects of ICDS with respect to excessive delegation and provisions contrary to court rulings, have been addressed by the amendments introduced in Finance Act 2018 with retrospective effect from fiscal year 2016-17. Though the taxpayers are now bound by the express legislative provisions, there are few interpretation challenges requiring deliberation while undertaking ICDS compliance at the time of tax audit and income tax return filing.

In this publication, we have summarised the relevant provisions of Income-tax Act, key observations of Delhi High Court ruling, ICDS notification, CBDT Circular as also key differences between ICDS and AS. This also summarises key issues and points for consideration by taxpayers along with possible approaches. We hope this publication will be a useful guide for implementation of ICDS.