Income Computation and Disclosure Standards (ICDS) – Section 2(50) | Income-tax Act, 2025 vs 1961

§ 2(50) · Income-tax Act, 2025

Income Computation and Disclosure Standards

ITA 2025 · 2(50) ★ New in 2025
Definition — Section 2(50)

Means such standards as may be notified under section 276(2) of the Income-tax Act, 2025. These are the Income Computation and Disclosure Standards (ICDS) — standards that govern how income is computed and what disclosures are required for tax purposes. They apply to taxpayers following the mercantile system of accounting and currently comprise 10 notified standards (ICDS I to X) covering areas such as accounting policies, valuation of inventories, construction contracts, revenue recognition, tangible fixed assets, effects of changes in foreign exchange rates, government grants, securities, borrowing costs, and provisions.

Act Comparison
Income-tax Act, 2025
2(50)
Income Computation and Disclosure Standards
Income-tax Act, 1961
—
No direct equivalent (but ICDS were notified under Section 145(2) of the 1961 Act)
Newly defined in 2025
Key Points
  • New explicit definition in the 2025 Act — ICDS was operationally present but not defined in 1961 Act
  • Currently 10 ICDS standards notified (ICDS I to X)
  • ICDS applies to taxpayers following mercantile accounting
💡 Practical Note

ICDS deviates from Ind AS/GAAP in several areas — companies must maintain two sets of computations (books vs tax) for accurate return filing.

Published by Simplified Tax India — Clear, section-wise comparison of Income-tax Acts. ← Back to Section 2 Definitions Table
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