Section 43CB of Income Tax Act
Summary of Section 43CB of Income tax Act
Section 43CB of Income tax Act Inserted by the Finance Act, 2018, w.r.e.f. 1-4-2017.
Section 43CB of Income tax Act
1 [Computation of income from construction and service contracts.
43CB. (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. ] |
Note on Section 43CB of Income Tax Act
1. Inserted by the Finance Act, 2018, w.r.e.f. 1-4-2017.
