India continues to make progress in simplifying its tax and accounting framework. The country is expected to introduce a reform that will be particularly relevant for companies from fiscal year 2027-28 onward.

Among the measures included in the Union Budget 2026–27, the Government has announced its intention to eliminate the need to maintain separate accounting requirements arising from the Income Computation and Disclosure Standards (ICDS). This measure incorporates the necessary elements into the Indian Accounting Standards (IndAS).

The objective is to reduce duplication, simplify the calculation of the taxable base, and move toward a more efficient compliance environment for companies operating in India.

Toward greater integration between accounting and taxation

Currently, companies may encounter differences between the accounting treatment applied under IndAS and the tax criteria established by ICDS.

In certain cases, these differences require additional adjustments to correctly calculate taxable income. This increases the administrative burden and adds complexity to closing and reporting processes.

To address this situation, the Indian Government has announced the creation of a joint committee between the Ministry of Corporate Affairs (MCA) and the Central Board of Direct Taxes (CBDT).

Its mission will be to analyze how the necessary tax requirements can be incorporated into IndAS so that, from fiscal year 2027-28, companies will no longer need to maintain a separate calculation system specifically based on ICDS.

The measure aims to simplify companies’ internal processes and reduce differences between financial information and information used for tax purposes.

Simplifying compliance in 2027

The reform forms part of a broader strategy by the Indian Government to improve the business environment. During 2026, India has intensified initiatives related to the digitalization of procedures, single-window systems, streamlined approvals, and the reduction of regulatory burdens.

In August, the Government highlighted that more than 47,000 regulatory obligations at the central and state levels had been eliminated, simplified, digitalized, or decriminalized as part of its programs to reduce compliance burdens.

This evolution points toward an increasingly digital regulatory environment focused on simplifying interactions with the authorities.

What does this mean for multinational companies?

Although the elimination of the separate ICDS regime is planned for fiscal year 2027–28, companies should begin assessing its potential impact in advance.

Key areas to consider include:

• identifying current differences between the treatments applied under IndAS and ICDS;
• reviewing tax adjustments made during closing processes;
• assessing how ERP and reporting systems could be affected;
• analyzing the implications for the group’s accounting and tax policies;
• and monitoring developments in the regulations that will establish the new framework.

For multinational groups with operations in India, greater convergence between accounting and tax criteria could help simplify processes. The aim is to reduce manual tasks and improve the consistency of information used for financial and tax purposes.

How can Auxadi help?

Auxadi can help multinational groups anticipate the impact of these changes and adapt their accounting, tax, and reporting processes ahead of their implementation.

Expanding into India can be complex due to the scale and scope of this market. Our experts, supported by our MySPV technology platform, help ensure our clients’ compliance. Talk to us about your needs, and we will adapt our services to support the international expansion of your multinational group.

About Auxadi

With 26 subsidiaries across Europe, the United States, and Latin America, Auxadi is today the leading Spanish accounting firm serving multinational companies and real estate investment funds. Through its technology-driven approach and strong client-focused culture, Auxadi acts as an extension of its clients’ finance departments worldwide, providing accounting, tax, payroll, transfer pricing, and corporate legal services.

Its proprietary MySPV technology platform, more than 300 employees, and over 1,700 clients have positioned Auxadi as a benchmark in the tech-enabled services sector, not only in Spain but internationally.

Autor/a:

Alba González

Account Manager – ES

Auxadi can become your ideal partner. We offer a one stop shop value added outsourcing services in the areas of accounting and reporting, tax compliance, payroll management and representation services, among others.