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.