Home > GST > Help Center > Books of Accounts Last Updated: Dec 09th 2023
Guide to Maintaining Business Books of Accounts
Accounting is required for all enterprises and professionals. Income Tax Act 44AA governs bookkeeping. Some don't need to maintain, but learn more
This document covers
- Who are required to maintain books of accounts?
- What are prescribed books of accounts and other documents?
- Place at which books of accounts are maintained
- Period of Maintenance of Books of accounts
- Penalty for not maintaining Books of accounts
1. Who are required to maintain books of accounts?
During the fiscal year, taxpayers are responsible to maintain accounting records when their turnover or gross receipts surpass a specified threshold. The threshold limit is determined by the following business characteristics:
- Specified Persons
- Non-Specified Persons
- Business eligible for presumptive taxation u/s 44AD, 44AE, 44BB or 44BBB
- Other business
A. Specified Professions
Unless presumptive taxation under section 44ADA is selected, Specified Professionals are not required to uphold the responsibility of maintaining records of accounts. What constitutes the threshold?
If the Gross receipts or Sales or turnover exceeds Rs 150,000 in all the 3 years immediately preceding the financial year.
Specified Professions (Notified by CBDT): Below are the professions notified by CBDT for the maintenance of books of accounts.
- Legal profession
- Medical profession
- Engineering profession
- Architectural profession
- Technical consultancy
- Interior decoration
- Film Artist (Actor, Camera man, director, music director, art director, dance director, editor, singer, lyricist, story writer, screen play write, dialogue writer and dress designer)
- Authorized representative
- Accountancy Profession
- Company Secretary
- Information Technology
B. Non-Specified Professions
Non Specified professionals are required to maintain books of accounts if the gross receipts or income exceeds the certain thresholds
| S.No | Type of Person | Threshold Limit |
|---|---|---|
| 1 | Individual or HUF | If the turnover or Gross receipts or sales exceeds Rs 25 lakhs (or) income exceeds Rs 2,50,000 in any of the 3 years immediately preceding the financial year |
| 2 | Any other person | If the turnover or Gross receipts or sales exceeds Rs 10 lakhs (or) income exceeds Rs 1,20,000 in any of the 3 years immediately preceding the financial year |
C. Business eligible for presumptive taxation u/s 44AD, 44AE, 44BB or 44BBB
- Business eligible for presumptive taxation u/s 44AD: If the taxpayer opted for presumptive taxation in any of the last 5 financial years but does not opted for 44AD in current financial year and income exceeds the maximum exemption limit
- Business eligible for presumptive taxation u/s 44AE, 44BB, 44BBB: If the taxpayer has claimed the income which is less than the profits deemed u/s 44AE, 44BB, 44BBB.
D. Other Business
Any business is required to maintain books of accounts if such business exceeds a certain threshold.
| S.No | Type of Person | Threshold Limit |
|---|---|---|
| 1 | Individual or HUF | If the turnover or Gross receipts or sales exceeds Rs 25 lakhs (or) income exceeds Rs 2,50,000 in any of the 3 years immediately preceding the financial year |
| 2 | Any other person | If the turnover or Gross receipts or sales exceeds Rs 10 lakhs (or) income exceeds Rs 1,20,000 in any of the 3 years immediately preceding the financial year |
2. What are prescribed books of accounts and other documents?
Rule 6F(2) prescribes the following books of accounts required to be maintained
- Cash book
- Journal
- Ledger
- Copies of bills and receipts issued by the person in relation to amounts exceeding Rs 25
- Original Bills and receipts issued to the person in respect of expenditure incurred
Note: For the persons who are carrying on medical profession, the following books are also required to be maintained along with above
- Daily Case register in Form 3C
- Inventory under broad heads of stock of drugs, medicines and other consumable accessories on the first and last day of financial year used for his profession.
3. Place at which books of accounts are maintained
- The books of accounts shall be maintained at the principal place of business or profession.
- If the taxpayer has more than 1 place of business or profession, he is required to maintain books of accounts at the principal place of business.
- If the taxpayer wants to maintain a separate set of accounts for each place of his business or profession, he can maintain at all other places.
4. Period of Maintenance of Books of accounts
- Books of accounts are required to be maintained for a minimum of 6 years from the end of the relevant Assessment year.
- For AY 2023-24, the taxpayer is required to maintain books of accounts until 2030 March.
- For AY 2022-23, the taxpayer is required to maintain books of accounts until 2029 March.
5. Penalty for not maintaining Books of accounts.
If the person fails to maintain books of accounts as per section 44AA, a penalty of Rs 25,000 will be levied u/s 271A.