Early IFRS movers could get tax benefit

Companies switching to IFRS in the first one year can expect some tax exemption from the government. The corporate affairs ministry would write to the finance counterpart to ensure that companies do not incur a high tax burden due to IFRS standards.

Secretary ministry of corporate affairs R Bandyopadhyay told reporters on Thursday that companies switching to IFRS should not be penalised by a higher tax burden, an issue that the finance ministry should look into. "There should be no adverse impact on companies for switching to IFRS…the finance ministry should look into this issue," he said.

The secretary said that the ministry has formed a core committee under his chairmanship—The National Committee on Implementation of IFRS—that has representation from both the finance ministry and the Central Board of Direct Taxes (CBDT). The committee would look into the broad issues for companies switching to the new accounting standard. "Finance ministry officers are represented in the committee. They will look into maters of tax implications," Bandyopadhyay said.