Section 276(1)

Subject to the provisions of sub-section (2),

Income chargeable under the head “PGBP” or “Income from other sources”

shall, be computed as per either cash or mercantile system of accounting regularly employed by the assessee.

Section 276(2)

CG may notify income computation and disclosure standards

to be followed

by any class of assessees or

in respect of any class of income.

Vide Notification No. S.O.3079(E) dated 29.9.2016,

CG has notified 10 ICDSs to be applicable from A.Y.2017-18.

The notified ICDSs have 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 “PGBP” or “Income from other sources”.

The notified ICDSs shall not apply to

an individual or a HUF who is not required to get his accounts of the tax year audited in accordance with section 44AB

Section 276(3)

AO may make an best judgement assessment in the manner provided in section 271,

where–

(a) he is not satisfied about the correctness or completeness of the accounts of the assessee; or

(b) method of accounting provided in sub-section (1) has not been regularly followed by the assessee; or

(c) income has not been computed as per ICDS notified u/ss (2).