Section 15 of Finance Act 2018
[Section 15 of Finance Act 2018 deals with Insertion of new section 43CB. and is covered in CHAPTER III DIRECT TAXES]
Insertion of new section 43CB.
15. After section 43CA of the Income-tax Act, the following section shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2017, namely:—
“43CB. Computation of income from construction and service contracts.—
(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)—
(i) | the contract revenue shall include retention money; | |
(ii) | the contract costs shall not be reduced by any incidental income in the nature of interest, dividends or capital gains.”. |