Can ICDS apply to a person following cash system of accounting and to the person whose books of account for the year are not required to be audited u/s 44AB.

Manual - Introduction

ICDS would apply to every person following mercantile system of accounting, irrespective of the level of income. It would not apply to a person following cash system of accounting. It would not also apply to individuals and HUFs whose books of account for the year are not required to be audited under section 44AB. Audit under section 44AB is required only if a person is carrying on business or profession. Accordingly in case of an Individual or HUF, ICDS would apply only if such person is carrying on business or profession. ICDS would not apply if such individual or HUF has no income under the head “Profits and Gains of Business or Profession”, but has income under the head “Income from Other Sources”, though he/it follows mercantile system of accounting for income falling under such head of income.

Dated: 11-8-2017