Final Report of the Committee constituted for formulating Accounting Standards for the purposes of notification under section 145(2) of the Income-Tax Act, 1961.
October, 26th 2012
Subject: Final Report of the Committee constituted for formulating
Accounting Standards for the purposes of notification under section 145(2) of the
Income-tax Act, 1961.
Section 145 (1) of the Income-tax Act, 1961 (`the Act') provides that the
income chargeable under the head "Profits and gains of business or profession" or
"Income from other sources" shall [subject to the provisions of sub-section (2)] be
computed in accordance with either cash or mercantile system of accounting
regularly employed by the assessee. Section 145 (2) provides that the Central
Government may notify Accounting Standards (`AS') for any class of assessees or for
any class of income.
2. The Central Board of Direct Taxes (`CBDT') constituted a Committee
comprising of departmental officers and professionals in December, 2010 to inter alia
suggest AS for the purposes of notification under section 145 (2) of the Act.
3. The Committee submitted its first Interim Report in August 2011. A
discussion paper containing the main recommendations of the Committee was issued
in October, 2011 for inviting comments/suggestions from all stakeholders.
4. The Committee has submitted its Final Report in August, 2012. The
Committee recommended that the AS notified under the Act should be made
applicable only to the computation of taxable income and a taxpayer would not be
required to maintain books of account on the basis of AS notified under the Act.
The Committee examined all the 31 AS issued by the ICAI and recommended
notification of AS on 14 issues under the Act and formulated drafts of AS on these
issues. The Committee has termed them as "Tax Accounting Standards" (TAS) to
distinguish from the AS issued by the ICAI/notified under the Companies Act, 1956.
5. The Final Report of the Committee (including drafts of the 14 TAS submitted
by the Committee) is uploaded on the Finance Ministry website (www.finmin.nic.in)
and Income-tax Department website (www.incometaxindia.gov.in) for comments
from stakeholders and general public.
6. The comments and suggestions on the final report may be submitted by 26th
November, 2012 at the email addresses (email@example.com or firstname.lastname@example.org) or
by post at the following address with "comments on Final Report of Accounting
Standards Committee" written on the envelope:
Director (Tax Policy & Legislation)-III
Central Board of Direct Taxes,