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Income-tax

Income-tax

 

Some of the items which have an effect on the liability of a bank for income-tax and therefore, need to be specifically considered by the auditor are discussed in the following paragraphs.

The Statutory Auditor should consider impact of Income Computation and Disclosure Standards (ICDS) issued vide notification dated 31 March 2015 by CBDT while calculation provision of Tax. The notification requires income computation and disclosure standards to be followed by all assessees, following the mercantile system of accounting, for the purposes of computation of income chargeable to income-tax under the head “Profit and gains of business or profession” or “Income from other sources”.

ICDS No.
Name
I
Accounting Policies
II
Valuation of Inventories
III
Construction Contracts
IV
Revenue Recognition
V
Tangible Fixed Assets
VI
Effects of Changes in Foreign Exchange Rates
VII
Government Grants
VIII
Securities
IX X
Borrowing Costs
X
Provisions, Contingent Liabilities & Contingent Assets

 

The notification came into force with effect from 1st day of April, 2015, and accordingly applies to the assessment year 2016-17 and subsequent assessment years.