Revenue recognition for construction and service contracts

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, as per the income computation and disclosure standards notified under section 276(2).

The profits and gains arising from a contract for providing services under sub-section (1) shall be determined— (a) on the basis of project completion method, if the duration of such contract is not more than ninety days;

For the purposes of percentage of completion method, project completion method or straight line method under this section,— (a) the contract revenue shall include retention money;