Sunday, 24 May 2015

Challenges in new tax accounting standards


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01.                        Taxpayer not provided any time to adjust with the new system. It applied immediately.

02.                        Advance tax for FY 2015-16 required to be computed on the basis of profit under TAS.

03.                        Provision of Warranty not covered under contingent liability.

04.                        Builder is not a contractor but now forced to follow percentage completion method.

05.                        It is now difficult to decide whether a software is a product or a service.

06.                        Purchase on credit terms – IND AS needs segregation but TAX is silent.

07.                        Accounting of Termination of contract not covered under TAS.

08.                        Non integral forex operation required to be considered in profit & loss a/c.

09.                        Forex swap now no more a settlement.

10.                        Capital government  grants now required to be considered in Income.

11.                        Interest capitilsation  of borrowing cost is now a complex process.

12.                        Requires to recognize contingent assets.

13.                        Applicability of percentage completion method applied to IT & ITES services.

14.                        In case of conflict – Income tax act prevails over TAS.

15.                        Gross revenue/ expenditure required to be reported . The same  become problem for people who deals in share trading.

 

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