With the Real Estate (Regulation and Development) Act, 2016 (RERA) coming into effect from May 1, the draft norms advise to do away with the circumstance of obtaining all ‘critical approvals’ for revenue reputation.
“Since the recognition of revenue below different situations is deferred up to incurrence of 25 per cent of the construction and development fee (which does no longer consist of land cost), the condition of acquiring crucial approval is not determined with the aid of the Committee to be very relevant,” it said.
The proposed norms also do no longer provide for capping the recognition of sales based on the degree final touch decided as regards to the task price incurred
ICAI guidance observe
The fresh draft is based totally on the steering be aware issued on actual property transactions via the Institute of Chartered Accountants of India last yr that become reviewed by using a central authority committee.
In all, it has proposed modifications in five areas, along with the definition of mission and challenge fee, sales recognition, utility of percentage final touch technique (POCM) for real estate tasks and transferable development rights.
The Central Board of Direct Taxes (CBDT) has now sought comments from stakeholders with the aid of May 26, and then the norms will be finalised.
“These ICDS are relevant from evaluation 12 months 2017-18 in appreciate of particular assessees for computation of profits underneath the head ‘profits and gains of business or career’ or ‘income from other resources’,” it said in a launch on Thursday.
In a nutshell, ICDS are accounting standards that are used to calculate the income tax liability.