New Delhi: A high-level CBDT panel has suggested framing of tax accounting standards (TAS) for computing precise income of real estate developers and for share-based payments to avoid tax litigations.
"TAS covering ...Share based payment, revenue recognition by real estate developers, service concession arrangements... and exploration for and evaluation of mineral resources be considered for notification under the Income Tax Act", said the CBDT panel in its report to the Finance Ministry.
The Central Board of Direct Taxes (CBDT) had constituted the 11-member Committee to harmonise the Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) with the provisions of the Income Tax Act for the purposes of notification.
The Committee, in its final report, suggested that the accounting standards issued by the ICAI needed to be harmonised with the provisions of the Income Tax Act before notification.
The Committee noted with concern that under the current dispensation, a taxpayer may be required to maintain two sets of books of account -- one in accordance with the Accounting Standards issued by the ICAI and another in accordance with the Accounting Standards notified under the Act.
The Committee recommends that the Accounting Standards to be notified under the Act should be made applicable only to the computation of taxable income and a taxpayer need not maintain separate set of books of account.
The CBDT panel also suggested the Accounting Standards to be notified under the Act may be termed as "Tax Accounting Standards" (TAS), to distinguish the same from the Accounting Standards issued by the ICAI.
The CBDT has sought public comments on the report by November 26.
First Published: Friday, October 26, 2012, 21:41