ICDS VII: Tax Treatment of Government Grants as Income, Excludes Charitable Trusts, Requires Disclosure and Compliance

ICDS VII addresses the tax treatment of government grants, defining them as income when received in any form, such as subsidies or cash incentives, under the heads 'Profits and gains from business or profession' and 'Income from other sources.' It excludes grants to charitable trusts and certain other government aids. The standard outlines recognition criteria, requiring reasonable assurance of compliance with grant conditions and receipt. Grants related to depreciable assets reduce asset cost, while others are recognized as income over relevant periods. Refunds of grants necessitate reversal of initial recognition. Transitional provisions apply from April 1, 2016, and disclosures are required for recognized and unrecognized grants.