What is ICDS?

Ans. ICDS stands for Income Computation and Disclosure Standards. These have been issued by the Central Government in the exercise of the powers conferred by Section 145(2) of the Income-tax Act, 1961 to bring uniformity in the accounting policies and provisions of the Income-tax Act and to reduce litigations. The following are the notified ICDS:

1. ICDS I: Accounting Policies

1. 2. ICDS II: Valuation of inventories

3. ICDS III: Construction contracts

4. ICDS IV: Revenue Recognition

5. ICDS V: Tangible fixed assets

6. ICDS VI: The effects of change in Foreign exchange rates

7. ICDS VII: Government Grants

8. ICDS VIII: Securities

9. ICDS IX: Borrowing costs

10. ICDS X: Provisions, Contingent Liabilities, and Contingent Assets

ICDS is applicable only for the computation of taxable income and not for the maintenance of books of account.​