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Maintenance of books of accounts u/s 44aa

Aswathi (NA) (58 Points)

18 July 2012

A software professional earning professional fees for the first time during the previous year, what is the limit for maintaining the books of accounts u/s 44AA and what are the allowable expenses?? In case of maintainance of books what all have to be shown in the balance sheet??

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7 Replies

Yajendra Adhikari (Chartered Accountant) (334 Points)
Replied 18 July 2012

If his receipts are likely to be greater than Rs. 10 Lakhs or Gross Profit is like ly to be greater than 1,20,000, Then he is required to maintain Books of Accounts u/s 44AA>

He can Claim any expenses relation to his profession.

Balance Sheet must show all the asssets and liabilities & Capital

Aswathi (NA) (58 Points)
Replied 18 July 2012

The professional is having an income of Rs. 170000 and on which TDS has been deducted u/s 194J. So he is not required to maintain the books, right Sir?

Also we can write off some expenses against the income of Rs. 170000/-??

CA.Varalakshmi.M (Manager-Finance) (482 Points)
Replied 18 July 2012

Yes, as his receipts are only Rs.1,70,000 P.a ,he need not maintain books of accounts

Yes,he can claim certian expenses related to his profession like travelling,conveyance,rent etc.

Aswathi (NA) (58 Points)
Replied 18 July 2012

But when I read Sec. 44AA, it is written that if the gross receipts is likely to exceed Rs. 150000/- then the person has to maintain the specified books of accounts. So I am confused. So what is this limit of Rs. 150000/-??

Aswathi (NA) (58 Points)
Replied 18 July 2012

anyone pls reply ASAP.

CA.Varalakshmi.M (Manager-Finance) (482 Points)
Replied 18 July 2012

Hi @ Ceee

Every person carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or authorised representative or film artist shall keep and maintain the books of account and other documents-----if his total gross receipts in the profession do not exceed one lakh fifty thousand rupees in any one of the three years immediately preceding the previous year, or, where the profession has been newly set up in the previous year, his total gross receipts in the profession for that year are not likely to exceed the said amount.

For the persons carrying on business and Profession other than above,then the limit is 10 lakhs gross receipts (or) 1.2 Lakhs income as specified in earlier replies

Hope this clarify ur doubt