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What books of account have been prescribed to be maintained by a person carrying on business/profession under the Income tax Act 1961? ||

Print PDF eBookThe Income-tax Act 1961 does not prescribe any specific books of account for a person engaged in business or in non-specified profession. However, such a person is expected to keep and maintain such book of account and other documents as may enable the...

The Income-tax Act 1961 does not prescribe any specific books of account for a person engaged in business or in non-specified profession.

However, such a person is expected to keep and maintain such book of account and other documents as may enable the Income Tax Assessing Officer (ITO) to compute his total income in accordance with the provisions of the Income Tax Act, if: -.

Particulars

Individual or HUF
Any other assessee
In case of existing business or profession, income or gross turnover in any one of the 3 three preceding previous years exceeds the following-    
·        Income from business or profession 2,50,000 Rupees 1,20,000 Rupees
·        Turnover/gross receipts in the business or profession 25,00,000 Rupees 10,00,000 Rupees
In case of newly setup business or professions, income / gross turnover of the first previous year is likely to exceed the following amount: –
·        Income from business or profession 2,50,000 Rupees   1,20,000 Rupees
·        Turnover/gross receipts in the business or profession

 

  25,00,000 Rupees   10,00,000 Rupees

For companies:- the books of account are prescribed under the Companies Act 2013.

Further, the Institute of Chartered Accountants of India has prescribed various Accounting Standards and Guidelines that are required to be followed by the business entities As regards the maintenance of books of account by a professional, who is engaged in specified profession has to maintain certain prescribed books of account, if the annual receipts from the profession exceed 1,50,000  Rupees in all the 3 (three) years immediately preceding the previous year (in case of newly set up profession, his annual receipts in the profession for that year are likely to exceed 1,50,000 Rupees).

Specified profession covers profession of legal(Lawyer/Advocate), medical, engineering, architectural, accountancy, company secretary, Chartered Accountant, technical consultancy, interior decoration, authorised representative, film artist or information technology.

For more details on the provisions relating to maintenance of books of account you may refer provisions of section 44AA of this act read with Rule 6F of the Income-tax Rules, 1962.​


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