Books of account

General duty (sub-rule 1). Anyone required to keep books under section 62(1)(b) must keep books and documents that enable the Assessing Officer to compute total income.

Specified professions (sub-rules 2 and 3). Persons carrying on a legal, medical, engineering or architectural profession, or the profession of accountancy, technical consultancy, interior decoration, authorised representative or film artist, must keep the records in sub-rule (4). The requirement does not apply if total gross receipts in the profession did not exceed Rs. 1,50,000 in any one of the three years immediately preceding the tax year, or, for a newly set-up profession, are not likely to exceed that amount in the year.

Records to keep (sub-rule 4). A cash book; a journal, if the accounts follow the mercantile system; a ledger; copies of bills or receipts issued for sums of two hundred and fifty rupees or more; original bills and receipts for expenditure of two hundred and fifty rupees or more; and payment vouchers, signed by the person, for expenditure not exceeding two hundred and fifty rupees where the cash book lacks adequate particulars.

Definitions (sub-rule 5). An "authorised representative" represents another person for a fee or remuneration before a Tribunal or an authority constituted under any law, but excludes the person's employee and persons practising law or accountancy. A "cash book" records all cash receipts and payments day to day and shows the cash balance at the end of each day, or of a specified period not exceeding a month. A "film artist" is a person engaged in a professional capacity in producing a cinematograph film as an actor, cameraman, director, music director, art director, dance director, editor, singer, lyricist, story writer, screen-play writer, dialogue writer or dress designer (the director categories include assistant directors).

Medical practitioners (sub-rule 6). In addition, a daily case register in Form No. 25 and an inventory, under broad heads, of drugs, medicines and consumable accessories on the first and last day of the tax year.

Where, how and for how long (sub-rules 7 to 10). Records for tax years not yet ended are kept at the place of the profession, or the principal place if there are several, or at each place if separate books are kept for each. Electronic records must remain accessible in India at all times, with daily back-ups kept on servers physically located in India. Records are kept for seven tax years from the end of the relevant tax year; where an assessment is reopened under section 279 or under section 147 of the Income-tax Act, 1961 as it stood before repeal, the records in existence at the time of reopening are kept until the reopened assessment is completed.