Real Estate ALERT – INCOME Tax Will Only Consider Turnover as per ICDS

Real Estate ALERT –
INCOME Tax Will Only Consider Turnover as per ICDS

BY CA Ankit Gulgulia (Jain)

Finance Bill, 2018 has newly inserted Section 43CB which
provides that profits and gains arising from Construction Contract shall be
determined in accordance with PUCM Method of ICDS Only

“43CB. ( 1) The profits and gains
arising from a construction contract or a contract for providing services shall
be determined on the basis of percentage of completion method in accordance
with the income computation and disclosure standards notified under sub-section
(2) of section 145:

Provided that
profits and gains arising from a contract for providing services,-

(i) with duration
of not more than ninety days shall be determined on the basis of project
completion method;

(ii) involving
indeterminate number of acts over a specific period of time shall be determined
on the basis of straight line method.

(2) For the purposes of percentage of
completion method, project completion method or straight line method referred
to in sub-section ( 1)-

(t) the contract revenue shall include retention
money;

(it) the contract costs shall not be reduced by
any incidental income in the nature of interest, dividends or capital gains.”.