New Income Computation Standards Set Under Section 145(2) for Uniform Tax Calculation
ICDS, or Income Computation and Disclosure Standards, are guidelines issued by the Central Government under Section 145(2) of the Income-tax Act, 1961. These standards aim to standardize accounting policies and provisions to minimize litigation and ensure uniformity in income tax computation. The notified ICDS covers areas such as accounting policies, inventory valuation, construction contracts, revenue recognition, tangible fixed assets, foreign exchange rates, government grants, securities, borrowing costs, and provisions related to contingent liabilities and assets. ICDS is used solely for computing taxable income and does not affect the maintenance of accounting records.
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