Maintenance of accounts by certain persons carrying on profession or business

Who is Required to Maintain Books of Account?

1. Every person carrying on the following Professions shall maintain books of accounts:
   1. Legal
   2. Medical
   3. Engineering
   4. Architectural profession
   5. The profession of accountancy
   6. Technical consultancy
   7. Interior decoration
   8. Any other profession as is notified by the Board in the Official Gazette
2. Every person carrying on business or profession [not being a profession referred to in clause above] shall keep and maintain such books of account and other documents as may enable the Assessing Officer to compute his total income in accordance with the provisions of this Act
   1. For old business or profession:
      1. if income from business or profession exceeds one lakh twenty thousand rupees (Rs. 1,20,000/-) or
      2. total sales, turnover or gross receipts, as the case may be, in business or profession exceed or exceeds ten lakh rupees (Rs. 10,00,000/-)
      3. in any one of the three years immediately preceding the previous year;
   2. For new business or profession:
      1. if income from business or profession is likely to exceed one lakh twenty thousand rupees (Rs. 1,20,000/-) or
      2. total sales, turnover or gross receipts, as the case may be, in business or profession are or is likely to exceed ten lakh rupees (Rs. 10,00,000/-),
      3. during such previous year;
   3. 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
   4. 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.
3. Income and Turnover for Individual and HUF under Section- 44AA
   1. For Individual and HUF income from business or profession shall be Two Lakh Fifty Thousand (Rs. 2,50,000/-) instead of Rs. 1,20,000/-.
   2. For Individual and HUF turnover or gross receipts from business or profession shall be Twenty Five Lakh (Rs. 25,00,000/-) instead of Rs. 10,00,000/-.
4. Penalty for Contravention of Section 44AA

As per Section 271A, if the assessee fails to maintain books of accounts as per Section 44AA then penalty of Rs. 25,000 may attract.