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About this tool
Find out whether section 44AA and Rule 6F force you to keep formal books, and which registers you must maintain.
Section 44AA of the Income-tax Act decides who must keep books of account, and this checker applies its two separate tests: the Rule 6F prescribed list for a specified profession whose receipts exceed Rs 1,50,000 in all three preceding years, and the income and turnover tests for every other business. It also applies the higher limits an individual or HUF gets under the Finance Act 2017 proviso, and flags the section 44AA(2)(iv) trap that catches anyone declaring less than the presumptive profit. The output names the registers to keep, the six-year retention rule and the section 271A penalty.
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Applies the all-three-years test for professions and the any-one-year test for businesses.
Uses Rs 2,50,000 and Rs 25,00,000 for an individual or HUF, and Rs 1,20,000 and Rs 10,00,000 otherwise.
Lists the Rule 6F(2) books, plus the Form 3C case register and drug inventory for doctors.
Anyone carrying on a specified profession — legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration and the notified professions — must keep records, and must follow the Rule 6F list once gross receipts exceed Rs 1,50,000 in each of the three preceding years. Any other business or profession is caught when income exceeds Rs 1,20,000 or turnover exceeds Rs 10,00,000 in any one of those years.
Rs 25,00,000 of turnover, or Rs 2,50,000 of income, in any one of the three preceding years. The Finance Act 2017 inserted this higher proviso for individuals and Hindu Undivided Families; every other assessee stays on Rs 10,00,000 and Rs 1,20,000.
A cash book, a journal where the mercantile system is followed, a ledger, carbon copies of bills and receipts issued above Rs 25, and original bills and vouchers for expenditure. A medical practitioner must additionally keep a daily case register in Form 3C and an inventory of drugs and consumables.
Six years from the end of the relevant assessment year, under Rule 6F(5). Failing to keep or retain the required books attracts a penalty of Rs 25,000 under section 271A, and separate GST and Companies Act retention rules may run longer.