Books of accounts by certain persons carrying on business or profession.

Books of account mean all business transaction purchase, sale, capital goods purchase or sale, all expenses during the relevant financial  year.

Books of accounts is statutory requirement of certain persons carrying on business or profession.

According the provision of Income Tax Act,1961 Sub-section  (1) of section 44AA, says, all persons, which are carrying on specified profession or specified business, which are listed as below, are mandatory required to keep and maintain books of accounts and other documents. This section 44AA(1) is  applicable to all persons, whether it is a individual, HUF, firm, company, BOI/AOP etc. except If the above persons, opts for section 44ADA, then they are not required to keep and maintain books of accounts.

Every person carrying profession/business are as follows-

1) Legal,

2) Medical,

3) Engineering or architectural profession or

4) Accountancy or technical consultancy or interior decoration or

5) Any other profession as is  notified by the Board in the Official Gazette

Every persons carrying on business or  profession, who are not carrying specified professions/business. Those persons requires to maintain and keep books of accounts when-

(i) if his income from business or profession exceeds one lakh twenty thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession exceed or exceeds ten lakh rupees in any one of the three years immediately preceding the previous year; or

(ii)  where the business or profession is newly set up in any previous year, if his income from business or profession is likely to exceed one lakh twenty thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession are or is likely to exceed ten lakh rupees, during such previous year; or

(iii)  where the profits and gains from the business are deemed to be the profits and gains of the assessee under section 44AE or section 44BB or  section 44BBB, as the case may be, and the assessee has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, during such previous year; or

(iv) 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,

[Provided that in the case of a person being an individual or a Hindu undivided family, the provisions of clause (i) and clause (ii) shall have effect, as if for the words “one lakh twenty thousand rupees”, the words “two lakh fifty thousand rupees” had been substituted :

Provided further that in the case of a person being an individual or a Hindu undivided family, the provisions of clause (i) and clause (ii) shall have effect, as if for the words “ten lakh rupees”, the words “twenty-five lakh rupees” had been substituted.]