Does ICDS apply for the purposes of computing exemption u/s 11 to 13.

Manual - Introduction

ICDS would not apply for the purposes of computing exemption u/s 11 to 13 since the computation of exemption is based on the commercial concept of income. However, where such income loses exemption, the computation would be under the various heads of income,and to the extent of such income falling under the heads PGBP and Income from Other Sources, the provisions of ICDS would apply if the books of account are maintained on mercantile system.

However, as per section 11(4A), if the trust or institution carries on business and the business is incidental to the objects of the trust or institution and separate books are maintained in respect of such business, the exemption provisions u/s 11 to 13 would apply. In such a case, the income from business has to be computed on commercial basis and provisions of ICDSs would apply. In such a case the trust would be required to compute its business income in accordance with ICDSs, even though it would be eligible for exemption u/s 11 to 13.

Dated: 11-8-2017