Applicability of POCM for construction and sale of residential flats by owner.

Hi

ICDS is applicable to the taxpayers who are recipients of income under the head “Profits and gains of business or profession” or “Income from other sources”, irrespective of the accounting standards followed by the company. The provisions of ICDS will also be applicable to the persons computing income under the relevant presumptive taxation scheme

Construction contract” is a contract specifically negotiated for the construction of an asset or a combination of assets that are closely interrelated or interdependent in terms of their design, technology and function or their ultimate purpose or use

so in ur case ur client is not a construction contractor and as per the guidance note apply ICDS IV, Revenue recognition, provision of parah 3,4,5 of ICDS IV would apply.

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CA poorvi Jain

Dear Sir,

Hope you are doing well !!

Yes, your understanding is correct.

Yes sir if he is taking ICDS III as base then thats incorrect you must quote the definition on construction contract as mentioned in ICDS and prove that your client is not within the ambit of such definition and hence such definition is not applicable on him.

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