CBDT’s Revised Income Computation & Disclosure Standards (ICDS) applicable from the AY 2017-18 along with Clarifications by way of 25 FAQs thereon
CBDT had notified revised ICDS (I to X) applicable from FY/ PY 2016-17 (AY 2017-18) excluding the cases of Individuals and HUF not subject to Tax audit. Subsequently, Form 3CD for reporting of ICDS adjustments was modified and now a set of 25 FAQs for clarifications on certain provisions of Revised ICDS has been issued by CBDT.
A. CBDT Clarifications (25 FAQs) on Revised ICDS (I to X)
CBDT has issued Clarifications by way of 25 Nos. FAQs on it’s ‘Revised Income Computation and Disclosure Standards (ICDS 1~10)’ notified earlier u/s 145(2) of the Income-tax Act, 1961, based on reference received from stakeholders in respect of certain provisions of ICDS, vide Circular No. 10/2017 dt. 23 Mar. 2017, as under:
B. Revised ICDS (I to X) notified by CBDT (dt. 29 Sept. 2016)
S.O. 3079 (E)- In exercise of the powers conferred by sub-section (2) of section 145 of the Income-tax Act, 1961 (43 of 1961, the Central Government hereby notifies the income computation and disclosure standards as specified in the Annexure to this notification to be followed by all assessees (other than an individual or a Hindu undivided family who is not required to get his accounts of the previous year audited in accordance with the provisions of section 44AB of the said Act) following the mercantile system of accounting, for the purposes of computation of income chargeable to income-tax under the head “Profits and gains of business or profession” or “Income from other sources”.
This notification shall apply to the assessment year 2017-18 and subsequent assessment years. (…contd…)
List of ICDS (I to X) as Revised by CBDT
C. Form 3CD modified for ICDS Reporting Adjustments thru Income-tax (23rd Amendment) Rules, 2016 (dt. 29 Sept. 2016)
S.O. 3080(E).— In exercise of the powers conferred by section 44AB, read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-
1. (1) These rule may be called the Income-tax ( 23rd Amendment) Rules, 2016. (2) They shall come into force with effect from 1st April, 2017.
2. In the Income-tax Rules, 1962, in Appendix II , in Form No. 3CD, in Part-B, in clause 13, for sub-clause (d), the following shall be substituted ,namely, — (…contd…)
D. CBDT Notification dt. 29 Sept. 2016 rescinding Previous CBDT Notification on ICDS dt. 31 Mar. 2015
S.O. 3078(E). — In exercise of the powers conferred by sub-section (2) of section 145 of the Income-tax Act, 1961(43 of 1961), the Central Government hereby rescinds the notification of the Government of India in the Ministry of Finance, Department of Revenue, published in the Gazette of India, Part-II, Section 3, Sub-section (ii), vide notification number S.O. 892(E) dated the 31st March, 2015, except as respects things done or omitted to be done before such rescission.
E. CBDT Invites Suggestions/ Comments on ICDSs and defers applicability of ICDS to 1 April, 2016 onwards
On 26 Nov., 2015 CBDT went into review mode and invited comments/suggestions from stakeholders on ICDS earlier notified by it to be applicable from 1st April 2015 onwards. Pending consideration of representations received by CBDT, it has been decided to defer applicability of ICDS to 1st April, 2016, i.e. previous year 2016-17 (Assessment Year 2017-18), onwards.
F. ICAI seeks Postponement of ICDS Implementation and Submits FAQs and Amendments Proposals thereon
The Direct Taxes Committee of ICAI has made detailed Representation to CBDT for deferment of implementation of ICDS, due to difficulties that would be faced by stakeholders on implementation of ICDS w.e.f. 1 Apr. 2015. The representations made by ICAI were considered positively by the CBDT’s Expert Committee on ICDS and the ICAI was asked to prepare Detailed FAQs and recommended amendments to ICDS.
G. Previous ICDS Notification No. 32/ 2015 dt. 31 March 2015, rescinded on 29 Sept. 2016
Tax Accounting Standards or Income Computation and Disclosure Standards have been notified by the CBDT vide Notification No. 32/2015 dt. 31 March, 2015, applicable w.e.f. 1 April 2015, i.e. assessment year 2016-17 onwards.
It may, however, be noted that this Notification has been rescinded by the CBDT on 30 Sept. 2016 vide Notification No. 86/2016, as explained above.