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Section 44AA – Maintenance of Accounts

Case – I Persons carrying on specified profession

Specified profession – Profession of legal, medical, engineering, architectural, accounting, technical consultancy, interior decoration, film artist or authorised representative.

Persons carrying on specified profession and his gross receipts exceeds Rs. 1,50,000 in all the three immediately preceding years or in case of a new profession  likely to exceed Rs.1,50,000 in the year of set up are required to maintain specified books of account.

Persons carrying on specified profession and not covered above are required to maintain such books of account and other documents as may enable the assessing officer to compute his taxable income.

Specified books of accounts – Cash book, journal, ledger, carbon copies of bills exceeding Rs. 25,original bills issued to him, payment vouchers

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Case – II Other assessee

In the following cases, assessee is required to keep and maintain such books of account and other documents as may enable the Assessing Officer to compute his total income in accordance with this Act.

  1. His income from business or profession exceeds rs. 1,20,000 or his turnover (gross receipts in case of profession) exceeds rs. 10,00,000 in any one of the three immediately preceding years. (Limit will be Rs. 2,50,000 for income and Rs. 25,00,000 for turnover in case of Individual and HUF from Financial year 2-17-2018)
  2. In case of newly setup business or profession, his income is likely to exceed rs. 1,20,000 or his turnover (gross receipts in case of profession) is likely to exceed rs. 10,00,000 (Limit will be Rs. 2,50,000 for income and Rs. 25,00,000 for turnover in case of Individual and HUF from Financial year 2-17-2018)
  3. Where the profits and gains from the business are deemed profits under section 44AE, 44BB or 44BBB and the assessee has claimed his income to be lower than the profits or gains so deemed
  4. Upto Financial year 2015-16 – Where the profits and gains from the business are deemed profits under section 44AD and he has claimed his income to be lower than the profits and gains so deemed and his income exceeds the maximum amount not chargeable to tax during such year.
    From Financial year 2016-17 – where the provisions of sub-section (4) of section 44AD are applicable in his case and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year.
  5. Section 44ADA Presumptive taxation for Professionals – The assessee filing return under section 44ADA is not required to maintain books of account under section 44AA.

Period of maintenance of books

The books of accounts are to kept and maintained for a period of six years from the end of the relevant assessment year. In other words accounts are to be kept for seven years from the last date of financial years.

About Rohit Pithisaria

Rohit Pithisaria founded TaxAdda in July 2012. He is Practicing Chartered Accountant from Jaipur and been in practice for more than 7 years. He is actively writing from very beginning of his professional career and is author of various tax articles and blogs.

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