- The Central Government had notified 10 Income Computation and Disclosure Standards (‘ICDS”) vide Notification No. 32 of 2015 dated 31 March 2015.
- The notified ICDS were applicable to all assessees following mercantile system of accounting for computation of income chargeable under the head ‘profits and gains from business or profession’ and ‘income from other sources’ from AY 2016-17 onwards
- Subsequent to notification of the ICDS, owing to various implementation issues, a number of representations were received which were examined by an Expert Committee. In response to the same, the Committee recommended a two-fold approach for the smooth implementation of ICDS viz. amendment to the provisions of ICDS in respect of certain issues and issuance of clarifications by way of FAQs for the rest of issues.
- Accordingly, the Ministry of Finance deferred the applicability of ICDS by one year (Press Release dated 6 July 2016) for considering the recommendations of Expert Committee and making suitable changes to tax audit forms. As such, the ICDS is now applicable from AY 2017-18 onwards.
- The CBDT, further, through its Notification no. 86/2016 rescinded the ICDS issued vide notification no. 32 /2015 on 29 September 2016 and issued revised ICDS (after making certain significant changes) vide Notification no. 87/2016, also making suitable changes to tax audit forms vide Notification no. 88/2016.
In furtherance to the revised ICDS notified, on the recommendations of the expert committee, CBDT issued certain clarifications vide circular no. 10/2017 dated 23 March 2017. Our newsflash captures the clarifications issued in the form of FAQs.