Clarifying the doubts raised regarding the Income Computation and Disclosure Standards (ICDS), the Finance Ministry has said that LPG subsidy received by individuals in their bank accounts will continue to be exempt from income tax. The Ministry said that the provision in the Finance Bill, 2015, will not affect the LPG subsidy and other welfare subsidies received by individuals. The ministry release stated that to restate the position, the provision in the Finance Bill, 2015, will not affect the LPG subsidy and other welfare subsidies received by individuals.
There were doubts being raised by tax experts over an amendment in Finance Bill, 2015 that expanded the definition of taxable income to include subsidies, grants, cash incentive and duty drawback. The Finance Bill, 2015 passed by Lok Sabha on April 30 proposes to align the definition of income with that provided in ICDS for this purpose. The central government notifies ICDS for any class of assesses or for any class of income.
The ministry has further clarified that the ICDS is applicable to persons having income chargeable under the head 'Profits and gains of business or profession' or 'Income from other sources' and following Mercantile System of Accounting. The Central Board of Direct Taxes (CBDT) notified ICDS on 31.3.2015 vide Notification number S.O. 892 (E) after wide consultations with the stakeholders for which the draft was placed in the public domain. Sub-section (2) of section 145 provides that the Central Government may notify ICDS for any class of assesses or for any class of income.