Accounts And Bookkeeping

We vardhman Taxcon help to maintain the book of accounts for the purpose of smooth running of small businessess.

Accounts and Bookkeeping means maintaning of records of each transaction of Business.Books of accounts including Invoices or bills, vouchers & receipts are required to be maintained under different Act or laws – Income Tax Act 1961, Companies Act 2013 and GST Act 2017.Period of retention are different in different acts or laws. 

Under GST Act 2017:

Every registered person has to maintain GST records at the principal place of business.

List of records to be maintained

*Production or manufacture of goods
*Inward and outward supply of goods or services or both
*Stock of goods
*Input tax credit availed
*Output tax payable and paid and
*Other particulars as may be prescribed

Period of retention :Books and records should be maintained for 6 years from the last date of filing of the annual return (31st December) for that year.

Under Companies Act 2013:

Every company has to maintain books of accounts, at the registered office or any office that board of directors may decide. In case books are maintained at an office other than the registered office, it must intimate the same to ROC.Record can be maintened by company electronically form also.

List of books of accounts to be maintained

*Cash flow statement
*Records of sales and purchases,
*Records of assets and liabilities
*Items of cost
*Deeds, vouchers, writing, documents, minutes, and registers whether in physical or electronic mode

Period of retention: Books should be maintained for a period of 8 years from the end of the relevant financial year.

Under Income Tax Act 1961:

If the sale/turnover/gross receipts from the business or profession is more than Rs. 25,00,000 or the income from business or profession is more than 
Rs. 2,50,000 in any of the 3 preceding years, then books of accounts will be compulsorily maintained.

professions covered under this provision –
Legal,Medical,Engineering,Architectural,Accountancy,Technical consultancy,Interior decoration,Authorised Representative(one who charges fees for representing someone before tribunal or any authority),Film artist (producer, editor, actor, director, music director, art director, dance director, cameraman, singer, lyricist, story writer, screenplay or dialogue ,writer and costume designers),Company secretary.

Thus, if the above-mentioned professions have an income of more than Rs. 2,50,000 in any of the 3 preceding years, they need to maintain books of accounts.
In case of a new profession also, if the income is expected to be more than Rs. 2,50,000, the professionals should maintain books.  

List of Books of accounts as per Rule 6F
*Cash Book
*Journal
*Ledgers
*Copies of bills or receipts
*Daily cash register with details of patients, services rendered, fees received and date of receipt (persons carrying on medical profession)
*Details of stock of drugs, medicines, and other consumables used (persons carrying on medical profession)
*If the income isn’t more than Rs. 2,50,000 in any of the 3 preceding years or not expected to be more than Rs. 2,50,000 in case of a new profession, then also books should be maintained. However, books, in this case, haven’t been specified – so any books can be maintained but it should be such that ATO can calculate the income.

Period of retention: Books should be maintained for a period of 6 years from the end of the relevant year.