CBDT issues draft ICDS on real estate transactions
On 31 March 2015, the Ministry of Finance (MoF) issued 10 Income Computation and Disclosure Standards (ICDS) operationalising a new framework for computation of taxable income by all assessees other than an individual or a Hindu Undivided Family who is not required to get his/her accounts of the previous year audited in accordance with the provisions of Section 44AB of the Income-tax Act, 1961 (IT Act). Such assessees need to follow 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’. The ICDS are applicable to the specified assessees from Assessment Year (AY) 2017-18.
The Finance Minister constituted a Committee (the Committee) comprising of experts from accounting, departmental officers and representatives from the Institute of Chartered Accountants of India (ICAI) to recommend the areas in respect of which further ICDS may be notified under the IT Act.
The Committee vide a press release dated 11 May 2017 has issued the draft ICDS on real estate transactions (draft ICDS). The draft ICDS is based on the Guidance Note issued on Real Estate Transactions (ICAI GN) issued by ICAI in 2012. For the purposes of providing uniformity, certainty and harmonising the same with provisions of the IT Act, the Committee suggested certain changes in draft ICDS in comparison to the ICAI GN.
The draft ICDS is open for comments from stakeholders till 26 May 2017.
This issue of First Notes provides an overview of the draft ICDS issued by the MoF.
To access the text of the draft ICDS on real estate transactions issued by CBDT, please click here .
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