Section 44AA: Maintenance of accounts by certain persons carrying on profession or business

Maintenance of books of accounts is one of the most important task for any business or profession. Let us discuss the provisions related to maintenance of accounts by certain persons carrying on profession or business in detail.

(1) Every person carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or any other profession so notified by the Board in the Official Gazette 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.

The Board has notified the following professions for the purposes of this section

(i) The profession of authorized representative.
(ii) The profession of film artists.
(iii) The profession of information technology.
(iv) The profession of the company secretary.

Where the gross receipts from these professions do not exceed 1,50,000 in any of the three years immediately proceeding the previous year in question and in case of newly set up profession the gross total receipts are not likely to exceed 1.50,000, such person are required to maintain such books of accounts and other documents as may enable the Assessing officer to compute the taxable income.

Where the gross receipts from these professions are likely to exceed 1,50,000 in all the three years immediately preceding the previous year or in case of newly set up profession his gross receipts in the profession for that year are likely to exceed 1,50,000, such persons are required to maintain such books of account as may be prescribed under rule 6F.

(2) Every person carrying on business or profession (not being a profession referred to in sub-section (1) shall

(i) If income from business or profession exceeds 1,20,000 [ 2,50,000 in case of individual and H.U.Fs.] or his total sales, turnover or gross receipts exceed 10 lacs [ 25 lacs, in case of individual and H.U.Fs.] in any one of the three years immediately preceding the previous year keep and maintain such books of accounts and other documents as may enable the Assessing Officer to compute his total income.

(ii) Where the business or profession in newly set up in any previous year and if income from such business a profession is likely to exceed 1,20,000 2,50,000 in case of individual and H.U.Fs.] or his total sales, turnover or gross receipts in business or profession are or is likely to exceed 10 lacs [2,50,000, in case of individual and H.U.Fs.] during such previous year, such person is also required to keep and maintain such books of accounts and other documents as may enable in Assessing Officer to compute his total income. No books are prescribed in these cases.

(iii) Business under Sections 44AE, 44BB, 44BBB. In case of persons carrying on business of civil construction, or plying, hiring or leasing goods, or the business of retail or exploration of mineral oil or civil construction in certain turnkey power projects claim that their profit from these type of businesses is lower than the profit computed under these sections, such persons are also required to keep and maintain such books of accounts and other documents as may enable the Assessing Officer to compute the total income of the assessee.