(a) ICDS will decide the turnover required to be computed for Presumptive taxation
(b) The CBDT issued a FAQ on March 23, 2017 and details of same available at following link.
(c) ICDS applicable only to Income from business/profession and Income from other sources
(d) The concept of prudence is no more applicable and hence no expected loss being applicable
(e) Unlike accounting standard which uses word “shall’, the ICDS uses the word “should” only.
(f) For 9 ICDS, there are transitional provisions.
(g) In case there is no Tax audit, then the disclosure of ICDS required to be made at computation.
(h) For computation of service work in progress, there are following method
Ø Physical measurement
Ø Estimated Cost
(i) Act & rules both will prevail over ICDS but the supreme court judgement are debatable.
(j) For construction contract, the transitional provision is that for existing old pprojects, they can continue with their old method till their completion.
(k) Provide for interest income in case the customer contract mention the same and in case same is debatable, then provide for bad debt u/s 36(1)(vi).
(l) Capitalise all interest expenses even the duration of creation of asset is less than 12 months.
(m) Provision of expenses must be reasonable
(n) Recognition of contingent asset.
(o) Section 115A - Tax on special case - ICDS applicable
(p) Any change is accounting policy is retrospective and any change in accounting estimate is prospective.
(q) ICDS not applicable to assesse who follow cash system. Also not applicable to Individual/ HUF who not subject to tax audit.
(r) No completed contracted method (CCM) now exist, only PCM ( Percentage Completion Method).