A panel of experts set up by the Central Board of Direct Taxes (CBDT) has proposed new tax accounting standards (TAS) that aims to remove the mark-to-market advantage for gains or losses on investments in FOREX derivatives.

The new proposals, which were put for public comments on Friday, recommend that a mark-to-market loss shouldn't be considered under TAS. These should be taken into account for only on realization.

So far, lobbying by industry has led to the delay of the new TAS, which would have made it compulsory for Indian companies to reveal their losses or gains from FOREX derivatives in their profit & loss statements from this fiscal year.

The panel has suggested modifications to the ICAI accounting standards that deals with a total of fourteen important aspects, including inventories and construction contracts.

Jamil Jamil Khatri, KPMG's global chief of accounting advisory services, said, "TAS gives out specific guidance removing all ambiguity. These would help reduce litigation in a big way."

The proposals also seek to prevent Indian companies availing govt. subsidies from claiming depreciation on assets bought using the grant.

One of the main objectives of the proposed TAS is to prevent tax evasion and pave the way for Indian companies to switch to International Financial Reporting Standards.