Section 57 — Revenue recognition for construction and service contracts

(1) 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, subject to provisions of sub-section (2), as per the income
computation and disclosure standards notified under section 276(2).
(2) For the purposes of sub-section (1), the profits and gains arising from a contract
for providing services shall be determined—
( a) on the basis of project completion method, if the duration of such con-
tract is not more than ninety days;
( b) on the basis of straight line method, if the contract involves indeterminate
number of acts over a specified period of time.
(3) 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;
( b) the contract costs shall not be reduced by any incidental income in the
nature of interest, dividends or capital gains.