CBDT to come out with accounting norms for real estate
New Delhi: The Revenue department Thursday said it will soon come out with accounting standards for the real estate sector to bring about uniformity in reporting of financial results.
"We will shortly come forward with accounting standard in this regard (for real estate sector)," Central Board of Direct Taxes (CBDT) chairperson Poonam Kishore Saxena told reporters here.
She further said the report of the CBDT-appointed committee on accounting standard for the real estate sector was being examined by the Tax Planning and Legislation (TPL), a wing of the CBDT.
The accounting standard deals with recognition of income and expenses and would bring about uniformity in reporting of accounts by the real estate companies.
Earlier, the CBDT report on black money too has pitched for modification of Accounting Standards to check generation of black money by real estate developers.
It said that land and real estate are possibly the most important class of assets used for investment of black money.
In order to deal with the problem, the CBDT had set up an accounting standard committee to harmonise the accounting standards issued by Institute of Chartered Accountants of India (ICAI) for the purpose of notification.
Saxena said, "the committee has submitted on August 14 to me their final report, but it does not actually lay down any standard for the purpose of real estate sector.
"They have pointed out that there are areas including revenue recognition in real estate developers on which there are no accounting standards and central government may consider on its own issuing that accounting standard", she added.
The report, she further said, was being examined by the tax officials and requisite notifications would be issued shortly.