<h1>ICDS III: Guidelines for Income Calculation from Construction Contracts Effective April 1, 2015, for Mercantile Accounting Users.</h1> The Income Computation Disclosure Standards (ICDS) III, issued by the Central Board of Direct Taxes, outlines the guidelines for determining income from construction contracts. Applicable to all assessees using the mercantile accounting system from April 1, 2015, it specifies that income should be calculated separately for each contract unless grouped by necessity. Contracts are considered separate if assets, proposals, and negotiations are distinct. Revenue is recognized based on the percentage of completion, with costs including direct, allocated, and borrowing costs. Early-stage revenue recognition is limited to incurred costs, and changes in estimates apply to current and future periods. Disclosures include recognized revenue and contract progress details.