The Companies (Accounting Standards) Rules, 2021 prescribe accounting standards applicable to companies under the Companies Act, 2013. The Central Government, in consultation with the National Financial Reporting Authority, has issued the Companies (Accounting Standards) Amendment Rules, 2026 to amend Accounting Standard (AS) 22 relating to accounting for taxes on income.

1. Paragraph 2A inserted in AS 22 providing that the standard applies to taxes on income arising from tax laws implementing the OECD Pillar Two Model Rules, including qualified domestic minimum top-up taxes. It further provides that enterprises shall not recognise or disclose deferred tax assets and liabilities related to Pillar Two income taxes.
2. Paragraphs 32A to 32D inserted requiring enterprises to disclose information relating to Pillar Two income taxes, including:
   • disclosure of application of the exception relating to deferred tax assets and liabilities;
   • separate disclosure of current tax expense or income relating to Pillar Two income taxes;
   • disclosure of known or reasonably estimable information on exposure to Pillar Two income taxes where legislation is enacted but not yet effective;
   • qualitative and quantitative disclosures regarding such exposure.
3. Paragraph 35 inserted specifying that:
   • paragraphs 2A and 32A apply immediately and retrospectively; and
   • paragraphs 32B to 32D apply for annual reporting periods beginning on or after April 1, 2025, with no disclosure required for interim periods ending on or before March 31, 2026.