1(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.
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1. Ins. by Act 13 of 2018, s. 15 (w.r.e.f. 1-4-2017).
Section 40A Expenses or payments not deductible in certain circumstances
Section 41 Profits chargeable to tax
Section 43A Special provisions consequential to changes in rate of exchange of currency
Section 43AA Taxation of foreign exchange fluctuation
Section 43B Certain deductions to be only on actual payment
Section 43C Special provision for computation of cost of acquisition of certain assets
Section 43CB Computation of income from construction and service contracts