Start your business with confidence

ACCOUNTING/ BOOK KEEPING

Call On 9873620711 for Quick Registration



ACCOUNTING/ BOOK KEEPING

Applicability

1. As Per Rule F Section 44AA of Income Tax Act,1961, Following Persons are required to keep proper book of Account.

  • i)  Non Specified Professionals/Business
    a) Other than Individual/HUF
    If income(profit) exceeds Rs.1.20 lacs or Turnover exceeds Rs.10 lacs, He is Mandatorily keeps books of accounts
    b) Individual/HUF
    If income (profit) exceeds Rs.2.5 lacs or Turnover exceeds Rs.25 lacs(from01/04/2017 onwards, he Mandatorily keeps books of accounts
  • ii) Specified Professionals/Business
    Mandatorily keeps books of Account

Notes:

  • In  all above cases, all assesses, whether specified professionals or any other persons, who opts the provisions of presumptive taxation under section 44ADA, Section 44AD, Section 44 AE, are not required to keep and maintain any books of accounts.
  • However, in case of all assesses, who covers under the provisions of sub -section (4) of section 44ADA, i.e. who have shown there profits below 8% or 6% or 50% etc and whose income exceeds the maximum amount, which is not chargeable to tax.
  • It means, if the income is below, the maximum amount, which is not chargeable to tax, then they are not required to maintain books of accounts                  
  • Following are Specified Business /Professions
    • Legal
    • Medical
    • Engineering
    • Architectural
    • Accountancy
    • Authorized representative — A person who represents another person for a fee before a tribunal or any authority constituted under any law. It does not include an employee of the person so represented or a person who is carrying on the profession of accountancy.
    • Film artist — This includes a producer, editor, actor, director, music director, art director, dance director, cameraman, singer, lyricist, story writer, screenplay or dialogue writer and costume designers.
    • Company secretary
  • All Profession other than above is non specified business /profession

2. Maintenance of Books of Accounts is one of the mandatory compliances that every company needs to follow. Whether it’s a private limited, public limited, OPC, or LLP, each of these entities requires obeying Section 128 of Companies Act, 2013 mandatorily. As per Section 128(1), every company must prepare and keep its books of accounts and other relevant books, financial statements, and papers at its registered office.

  • However, the place of keeping any or all of the aforesaid books could change at such other place in India as decided by the Board of Directors.
  • In case the place changes, the company needs to intimate such decision with the ROC within seven days. This must be in the form of a notice which needs to be in the writing form consisting of the full address of the decided place.

ACCOUNTING/ BOOK KEEPING BENEFIT

Following are benefit for keeping book of Account

  • Permanent recording of Transactions
  • Ascertainment of Profit and loss of business
  • Exhibition of total financial position
  • Cost Control
  • Helping Management of Business
  • Prevention of errors ,fraud and forgery
  • Comparative Analysis
  • Helping settlement of the dispute
  • Helping determination of tax
  • Keeping Accounting record for the purpose of GST
  • Keeping Accounting record for the purpose of Statutory Audit requirement under Companies Act,2013 in case of Company and LLP
  • Keeping Accounting record for the purpose of Tax Audit requirement under Income Tax Act,1961
  • Authentic and presentable documents before court
  • Helping in the valuation of assets and liabilities at the time of winding of the business and in case of insolvency of the owner
  • Helping in fixation of the sale price of a business
  • Testing arithmetical accuracy of accounts
  • Matching of Income and expenditure
  • Advantage in taking a loan
  • Settlement of outstanding debts receivable

 

Income tax rate as per old regime

In case of an Individual (resident or non-resident) or HUF or Association of Person or Body of Individual or any other artificial juridical person

Taxable Income

Tax Rate

Up to Rs. 2,50,000

Nil

Rs. 2,50,000 to Rs 5,00,000

5%

Rs. 5,00,000 to Rs. 10,00,000

20%

Above Rs. 10,00,000

30%

Less: Rebate under Section 87A [see Note]
Add: Surcharge and Health & Education Cess [see Note]

In case of a resident senior citizen (who is 60 years or more at any time during the previous year but less than 80 years on the last day of the previous year)

Taxable Income

Tax Rate

Up to Rs. 3,00,000

Nil

Rs. 3,00,000 to Rs 5,00,000

5%

Rs. 5,00,000 to Rs. 10,00,000

20%

Above Rs. 10,00,000

30%

Less: Rebate under Section 87A [see Note]
Add: Surcharge and Health & Education Cess [see Note]

 

In case of a resident super senior citizen (who is 80 years or more at any time during the previous year)

Taxable Income

Tax Rate

Up to Rs. 5,00,000

Nil

Rs. 5,00,000 to Rs. 10,00,000

20%

Above Rs. 10,00,000

30%

 

Add: Surcharge and Health & Education Cess

 

Note:- Rebate under Section 87A: The rebate is available to a resident individual if his total income does not exceed Rs. 5,00,000. The amount of rebate shall be 100% of income-tax or Rs. 12,500, whichever is less.

Note:- Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of 4% of such income-tax and surcharge.

 

You can contact with our expert for detail understanding about your tax liabilities and what will be right regime.