The Ministry of Corporate Affairs (MCA) on March 10, 2026, notified the Companies Accounting Standards Amendment Rules, 2026 to amend the Companies Accounting Standards Rules, 2021, in exercise of powers under the Companies Act, 2013, in consultation with the National Financial Reporting Authority.
The amendment introduces changes to Accounting Standard (AS) 22 concerning accounting for taxes on income related to the international tax reform framework based on the OECD Pillar Two Model Rules. A new provision clarifies that enterprises should neither recognise nor disclose deferred tax assets or liabilities related to taxes arising under Pillar Two legislation, which includes qualified domestic minimum top-up taxes implemented by jurisdictions.
Further, new disclosure requirements have been introduced requiring enterprises to disclose application of the exception related to Pillar Two taxes and separately disclose current tax expense or income related to such taxes. Companies must also provide qualitative and quantitative information about potential exposure to Pillar Two income taxes where the legislation has been enacted but not yet effective, although small and medium-sized companies are exempted from certain disclosure requirements.
[Notification No. G.S.R. 169(E)]
