Pre-amendment taxpayers


Pre-amendment, taxpayers were allowed to compute their income in accordance with any
method, provided they regularly employed the method and their income could be properly deduced from it. Section 145 was thereafter amended. And so, from the assessment year 1997-98, income chargeable under the head ‘profits and gains from business or profession’ or ‘income from other sources’can be computed by following either the cash or mercantile system of accounting– a mixture or ‘hybrid’ method of accounting is not permitted for the reasons as explained by the CBDT.


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