sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
« News Headlines »
 Here are other documents you need to file online ITR Got your Form-16 for FY18?
 10 must have documents to file your tax return
 Know all about how to file ITR FY 2017-18
 Government extends sale of pre-GST goods with stickers of revised price till July 31
 All 7 ITR forms for assessment year 2018-19 activated for e-filing: Income Tax Department
 Check if new salary structure is income tax efficient
 GST refund drive extended till June 16
 5 income tax returns filing mistakes you must avoid
 Your complete guide to file income tax return
 Input Tax Credit refund drive till June 14
 File Your Income Tax Return for FY 2017-18 Immediately, Know Why

Finance ministry suggests reconciling accounting standards
October, 21st 2011

In a move that can help solve corporate litigation with the tax departments and mark a step forward in Indias commitment to implement International Financial Reporting Standards (IFRS), the finance ministry has suggested reconciliation of Generally Accepted Accounting Principles (GAAP) and Tax Accounting Standards (TAS).

TAS are separate accounting standards to be notified under Section 145 (2) of the Income Tax Act, 1969, by the finance ministry.

A committee formed by the Central Board of Direct Taxes (CBDT) has recommended that TAS be different from accounting standards issued by the Institute of Chartered Accountants of India (ICAI) and notified by the ministry of corporate affairs under the Companies Act, 1956.

If the recommendations, made in a discussion paper, are accepted, taxable income would be computed based on provisions of TAS irrespective of the accounting standards followed for the preparation of financial statements by corporate entities.

Separate books of accounts will not be required to be maintained under TAS, reducing the compliance burden on businesses.

This will lead to more transparency in the system, according to experts.

Currently, there are lots of areas of litigation between tax departments and companies both on account of lack of clarity in the Income Tax Act, 1969, and flexibility offered by prevailing Indian accounting standards, said a person close to the drafting of the discussion paper who did not want to be identified.

If TAS and accounting standards are harmonized the scope for ambiguity will reduce considerably, the person said

The ministry has sought comments from all stakeholders on the suggestion by 11 November.

Once the tax accounting standards are notified by the income tax department, it will benefit the industry, as it will go a long way in reducing litigations by clearly specifying the way taxable income has to be computed, said Ved Jain, former president of ICAI.

According to a note circulated by consulting company KPMG in India to its clients, a copy of which was reviewed by Mint, this will largely help the government make a transition to IFRS. India pledged in 2009 that it would implement IFRS by 2011.

The ministry of corporate affairs is yet to notify final implementation dates for the adoption of 35 IFRS convergence standards, known as Ind-AS, in the absence of clarity around the tax impact of the transition, the KPMG note said.

The suggestion in the discussion paper would partially address the issue relating to the impact of transition of Ind-AS on taxation, as taxes payable (other than minium alternative tax) would be computed based on TAS...

After debating for over a decade on how best profits and gains of business be represented so that there is least ambiguity, the finance ministry last year constituted a committee to study harmonization of accounting standards issued by the ICAI with direct tax laws in India.

The committee was asked to suggest accounting standards that need to be adopted under section 145 (2) of the Income Tax Act along with relevant modifications. It was asked to suggest amendments to the Act in view of transition to an IFRS regime.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Portal Design Website Design Portal Designing Website Designing Web Design Professional Portal Design Professional Website Design Professional Web Design Portal Design India Website Design India Portal Designing India Website Designing India Web Design India Professional Portal Design India Professional Website Design India Chicago Professional Web Design New York Professional Web Design California Website Design Florida Website Design New Jersey Website Design Britain UK Website Design London Manchester Website Design

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions