<h1>ICDS VI Guidelines on Foreign Exchange Rates for Mercantile Accounting u/s 145(2) of Income Tax Act 1961.</h1> The Income Computation Disclosure Standards (ICDS) VI, issued by the Central Board of Direct Taxes (CBDT) under section 145(2) of the Income Tax Act, 1961, addresses the effects of changes in foreign exchange rates. Effective from April 1, 2015, for the assessment year 2016-17, it applies to all assessees using the mercantile accounting system. The standard covers the treatment of foreign currency transactions, translation of financial statements of foreign operations, and forward exchange contracts. It specifies the recognition and conversion of monetary and non-monetary items, exchange differences, and the classification and conversion of foreign operations.