Section 44AA: Maintenance of Books of Accounts

1. If the Sales from your Business/Profession is more than Rs. 25 Lakhs or Income from Business/Profession is more than Rs. 2.5 Lakhs in any of 3 preceding years, then Books of Accounts will be compulsory maintained

2. Following Professions are also mandatorily required to maintain Books of Accounts if their Income more than Rs. 2.5 lakhs in any of preceding 3 years.

• Legal
• Medical
• Engineering
• Architectural
• Accountancy
• Technical Consultancy
• Interior Decoration
• Authorised Representative (who charges fees to represent someone before tribunal or any authority)
• Film Artist (Actor, Cameraman, Director, music director, Art Director, Dance director, Editor, singer, Lyricist, story writer, screen-play writer, Dialogue Writer, Dress designer.

3. If the taxpayer is covered under Section 44AE/Section 44BB/Section 44BBB/Section 44AD and the taxpayer has claimed his Income lower than profits deemed under Section 44AE/Section 44BB/Section 44BBB/Section 44AD then maintenance Books of Accounts is compulsory.

Rule 6F: Books of Accounts to be maintained

The following books of accounts and other documents are required to be maintained:-

1. Cash Book

2. Journal (If books accounts are maintained according to mercantile system of accounting).

3. Ledger

4. Carbon copies of Bills, whether machine numbered or otherwise serial numbered, wherever such bills are issued by the person, and carbon copies or counterfoils of machine numbered or otherwise serial numbered receipts issued by him. However, this requirement will not apply in relation to sums not exceeding Rs. 25,000

5. Original Bills wherever issued to the person and receipts in respect of expenditure incurred by the person or where the bills and receipts are not issued and the expenditure incurred does not exceed Rs. 50, the Payment Vouchers prepared and made by the person shall be kept. However, the requirements as to preparation and signing of the payment vouchers shall not apply in a case where the cash book maintained by the person contains adequate particulars in respect of the expenditure incurred by him.

6. A person carrying on Medical Profession shall in addition to books of accounts mentioned above shall maintained:-

• • • A daily case register in Form No. 3C
    • An Inventor Book (under Broad head) as on the first and the last day of the previous year, of the stock of drugs, medicines and other consumable accessories used for the purpose of his medical profession. Place of Maintenance of Books of Accounts The Books of Accounts and other documents shall be kept and maintained by the person:-
    • Where he is carrying on the profession or,
    • Where the profession is carried on at more than 1 place – the books should be maintained at the principal place of business.
    • However, in case separate books of accounts are maintained in respect of each place where the profession is carried on, the books of accounts may be kept and maintained at the respective place at which the profession is carried on.

Period of Maintenance of Books of Accounts

All the books of Accounts specified above shall be kept and maintained for a period of 6 years from the end of the relevant assessment year.