Government grants recognition requires reasonable assurance of receipt and compliance; tax treatment depends on asset nexus and refund rules. Government grants in cash or kind that can be valued are taxable under business or other income heads; recognition requires reasonable assurance of both compliance with conditions and receipt, and must not be postponed beyond actual receipt. Asset specific grants reduce the cost or written down value of the relevant asset or asset block, while income related or compensatory grants are recognised over the period matching related costs or when receivable. Non relatable grants are apportioned among assets, and refundable grants reverse prior recognition against deferred credit or profit and loss with corresponding adjustments to asset carrying amounts and depreciation.