Who are required to maintain books of account? Rule 6f and Section Sec. 44AA in details.
Here, we talk about Maintenance of Books of Accounts and Rule 6F and discuss provision of Section 44AA of income tax act,1961, penalty as per section 271A in details.
In this article, you will clear about the following questions
- Provision of Section 44AA OF Income Tax Act,1961,
- Period for which Books of accounts maintain?
- Who are require to maintain books of account?
- Rule 6F of Income Tax Act,1961
- Penalty as per Section 271A of Income Tax Act,1961
Provision of Section 44AA OF Income Tax Act,1961
Every person carrying on any business or a profession (other than professions referred in Rule 6F), are required to maintain such books of account and other documents, as may enable the Assessing Officer to compute his total income, in following cases
(1) If his total income from business or profession exceeds 2,50,000 for Individual or HUF or his total sales/gross receipts from such business or profession exceeds Rs.25,00,000 for Individual or HUF in any of the three years immediately preceding the relevant previous year.
(2) In case of newly set of business or profession, the assessee will be required to maintain accounts if, during the relevant accounting year, either his total income is likely to exceed Rs.2,50,000 for Individual or HUF or the total sales or gross receipts are likely to exceed Rs.25,00,000 for Individual or HUF.
(3) If he is carrying on any business covered w/s 44AE, 44BB or 44BBB and Claims his income to be Lower than the presumptive profit computed under the said sections during the previous year.
(4) If the provisions of section 44AD(4) are applicable and his income exceeds the maximum amount not chargeable to tax in any previous-year.
Period for which Books of accounts maintain?
The books of account and other documents shall be kept and maintained for a period of 5 years from the End of the relevant assessment year.
Who are require to maintain books of account?
The following are the person who is require to maintain books of account.
- Interior decoration,
- Film artists,
- Company secretaries or
- Profession of Information Technology
Rule 6F of Income Tax Act,1961
Every person, carrying on the profession of legal, medical, accountancy, engineering, architectural profession, interior decoration, film artists, company secretaries or profession of Information Technology is compulsorily required to keep and maintain such books of account and documents as may enable the Assessing Officer to compute his total income in accordance with the provision of the Income-tax Act.
Such specified professionals shall be required to maintain ‘Prescribed books of account’ if:
(a) his gross receipts in all the three preceding previous years exceeds 1,50,000 or
(b) it is a new profession which is set up in the previous year, it is likely to exceed 1,50,000 in that previous year
The followings of the ‘Prescribed books of account’ and other documents under Rule 6F(2) are as follows:
(a) A cash book;
(b) A journal, if the accounts are maintained according to the mercantile system of accounting;
(c) A ledger
(d) Carbon copies of bills or serially numbered receipts issued; except if the bill or receipts are of an
amount less than R 25; and
(e) An original bill wherever issued to the person and receipts in respect of expenditure incurred by the
person or, where such bills and receipts are not issued and the expenditure incurred does not exceed
50, payment voucher prepared and signed by the person.
Penalty as per Section 271A of Income Tax Act,1961
If the above person is failure to keep or maintain Books of Accounts and Documents than Rs. 25,000 is levy as per section 271A.
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