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CMA Final · Direct Tax Laws and International Taxation · Income Computation and Disclosure Standards (ICDS)

Under the Income-tax Act, 2025, the comparison of actual cost and net realisable value of inventory in the nature of securities must be made:

The comparison of actual cost and net realisable value of securities held as inventory must be made category-wise, as provided in section 277(3). It is not made item by item or on an overall portfolio basis.

  1. AItem-wise for each security
  2. BCategory-wiseCorrect
  3. COn an overall portfolio basis
  4. DOnly at the end of the tax year on listed securities

Explanation

Section 277(3) states that the comparison of actual cost and net realisable value of securities shall be made category-wise. Item-wise comparison would be a different method and is not what the Act specifies.

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