Manual - Introduction

Circular No. 10/2017 - Dated: 23-3-2017 - Clarifications on Income Computation and Disclosure Standards (ICDS) notified under section 145(2) of the Income-tax Act, 1961

The IRDA Regulations require the accounts to be prepared by application of Accounting Standards prescribed by ICAI. Section 44 read with the First Schedule would prevail over ICDS. Therefore, ICDS would not be applicable to the computation of business income of insurance companies.

Further as clarified by the CBDT as:

The general provisions of ICDS shall apply to all persons unless there are sector specific provisions contained in the ICDS or the Act. For example, ICDS VIII contains specific provisions for banks and certain financial institutions and Schedule I of the Act contains specific provisions for Insurance business.

 

ICDS applicability clarified: sector-specific provisions and statutory overrides determine application to banks, insurers and financial firms. ICDS apply generally for income computation unless an ICDS contains sector-specific provisions or the substantive law provides a special regime; ICDS VIII addresses banks and certain financial institutions, while statutory and regulatory accounting requirements for insurance business prevail over general ICDS provisions.