Provisions for Method of accounting under Income Tax Act, 1961 is stated under Section 145, which talks about applicability of Income Computation and Disclosure Standards as notified by Central Government.
In continuation to this section, there are certain cases where provision related with its Methods of Accounting are stated i.e., Section 145A. This section more specifically deals with Income computation under PGBP.
Section 145A talk about certain cases (as stated below), where provisions related with its valuation are stated:
There is one exception to above provisions that inventory being securities held by scheduled bank or public financial institution shall be valued in accordance with the income computation and disclosure standards notified under sub-section (2) of section 145 after taking into account the extant guidelines issued by the Reserve Bank of India in this regard.
Furthermore, the comparison of actual cost and net realisable value of securities shall be made category-wise. It means that valuation of securities shall be done at category level. There might be possibility that there are number of securities under one category, then its valuation will be done at category level by consolidating the all the securities under each category.
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