Moving towards globalization, India is going to have major changes in its accounting and tax structure in coming days.

IFRS

From 1st April 2011, India has planned to adopt “International Financial Reporting Standard” (IFRS). Considering the guidelines of IFRS, previous year’s figures need to be disclosed in financial statement, and resultantly companies needs to implement IFRS with effect from 1st April, 2010. Indian Government has also planned to strengthen the National Advisory Committee on Accounting Standards (NACAS), a move that will make the Institute of Chartered Accountants of India (ICAI) report to NACAS. For this, it will hand over the supervisory role of both accounting and auditing standards to NACAS.

DIRECT TAX

On taxation front, major changes are planned to be implemented for Direct Taxes. Government of India has come up with “Direct tax code”, which will replace current Income Tax Act with radical changes therein. The New Tax Code aims at minimum exemptions and maximum simplification. Industry and all individuals shall have advantage of simplification viz. minimum litigations !

GST

India is also embarked upon implementing Goods and service Tax (GST) with effect from 1st April 2010. The proposed indirect tax regime will do away with most of the indirect taxes like excise and services levied by the Central Government and subsume state levies like VAT and local Entry-Tax. This will also simplify procedural complications, delays & reduce litigations The Central Government has announced that GST will be implemented as dual GST i.e. Central GST and State GST. The ‘New Tax Code’ and ‘GST’ are liberal taxation systems with minimum number of concessions / exemptions. This will simplify the tax system radically and in turn reduce administration cost of fiscal system.