Legal Framework and Practical Impact of Method of Accounting under Indian Income Tax : Clause 276 of the Income Tax Bill, 2025 Vs. Section 145 of the Income-tax Act, 1961
9 June, 2025
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Method of accounting: mandatory consistency and binding tax standards lead to AO power to assess by best judgment. Clause 276 permits either the cash or mercantile system for computing income provided the system is regularly followed, authorises the Central Government ... Summary
Method of accounting: mandatory consistency and binding tax standards lead to AO power to assess by best judgment.
Clause 276 permits either the cash or mercantile system for computing income provided the system is regularly followed, authorises the Central Government to notify binding Income Computation and Disclosure Standards for classes of assessees or income, and empowers the Assessing Officer to disregard accounts and make a best judgment assessment where accounts are incorrect or incomplete, the accounting method is not regularly followed, or notified ICDS are not applied.
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