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Maintenance of Books of Accounts Under Income Tax Act, GST Act & Companies Act

Books of accounts including vouchers and receipts are required to be maintained under different statutory laws – Income Tax Act, Companies Act 2013 and GST Act. Books to be maintained, retention period and compulsion requirements are different under all the 3 laws.

Under Income Tax Act

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.

Following professions are 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.  

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.

For how long should the books be maintained?

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

Under Companies Act

Every company has to maintain books of accounts, at the registered office or any office that board of directors may decide. If the company is maintaining books at an office other than the registered office, it has to intimate the same to RoC. The company can maintain the accounts electronically also.

For how long should the books be maintained?

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

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

Under GST Act

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

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

For how long should the records be maintained?

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

GSTR-9

All entities having GST registration are required to file GST annual return in form GSTR-9.

GSTR-9A

GST registered taxpayers who have opted for the GST Composition Scheme are required to file GSTR-9A

GSTR-9C

GSTR-9C is applicable to taxpayers who are required to obtain an annual GST audit of their accounts.

Frequently Asked Questions?
What is GSTR-9 Filing?

GSTR-9 or GST annual return is a type of GST return that must be filed by regular taxpayers and persons registered under GST composition scheme. GSTR-9 must be filed each year through the GST Common Portal or LEDGERS GST Sofware or at a GST Facilitation Centre.

Who should file GSTR-9A return?

Regular GST taxpayers filing GSTR-1, GSTR-2 and GSTR-3 must file GSTR-9A, consolidating information furnished during the previous financial year.

Who should file GSTR-9B return?

GSTR-9B return should be filed by electronic commerce operators who are required to collect tax at source. In addition to GSTR-9B return, electronic commerce operators will also be required to file GSTR-8 return, every month.

Who should file GSTR-9C return?

Regular taxpayers registered under GST having an annual aggregate turnover of over Rs.2 crores during a financial year are required to get their accounts audited and file a copy of the audited annual account and reconciliation statement along with GSTR-9C return. The GST annual audit can be done by a practising Chartered Accountant or Cost Accountant.

What information should be filed in GSTR-9 return?

The following information is expected to be filed in GSTR-9A return:

  1. Total value of purchases on which ITC availed (inter-State)
  2. Total value of purchases on which ITC availed (intra-State)
  3. Total value of purchases on which ITC availed (Imports)
  4. Other Purchases on which no ITC availed
  5. Sales Returns
  6. Other Expenditure (Expenditure other than purchases)
  7. Total value of supplies on which GST paid (inter-State Supplies)
  8. Total value of supplies on which GST Paid (intra-State Supplies)
  9. Total value of supplies on which GST Paid (Exports)
  10. Total value of supplies on which no GST Paid (Exports)
  11. Value of Other Supplies on which no GST paid
  12. Purchase Returns
  13. Other Income (Income other than from supplies)
  14. Return reconciliation Statement
  15. Arrears (Audit/Assessment etc.)
  16. Refunds
  17. Turnover Details
  18. Profit as Per the Profit and Loss Statemen
  19. Gross Profit
  20. Profit after Tax
  21. Net Profit
  22. Details of Statutory Audit
What is the penalty for late filing of GSTR-9 return?

A per day penalty of Rs.100, up to a maximum amount of Rs.5000 would be applicable for late filing of GSTR-9 return. Only if all the GSTR-1, GSTR-2 and GSTR-3 returns are filed, the taxpayer would be able to file GSTR-9 return on the GST Portal.

Should GSTR-9 return be audited?

Yes. Regular taxpayers registered under GST having an annual aggregate turnover of over Rs.5 crores during a financial year are required to the GSTR-9 return with audited accounts. GSTR-9 accounts can be audited by a practising Chartered Accountant or Cost Accountant.

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