Account Books for small vendors

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This query is : Resolved

Sunali (Querist)

05 September 2008 What about the small vendors like karyana shops etc....How should they prepare their accounts as most of the goods involve very nominal amounts..?

CMA Jitendra Singh

CMA Jitendra Singh (Expert)

05 September 2008 In case of very small setup ,atleast they can prepare cash books,bank book ,journals and ledgers of receivable & payables.They can retain receipts of all the monetory transactions.

Late CA Sampat Jain

Late CA Sampat Jain (Expert)

05 September 2008 IF YOU ARE A RETAIL TRADER AND TURNOVER IS LESS THAN 40 LACS .......YOU MAY NOT MAITAIN ACCOUNTS FOR THE PURPOSE OF INCOME TAX ACT:

SECTION 44AF SAYS:

44AF. (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an assessee engaged in retail trade in any goods or merchandise, a sum equal to five per cent of the total turnover in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum as declared by the assessee in his return of income shall be deemed to be the profits and gains of such business chargeable to tax under the head “Profits and gains of business or profession” :

Provided that nothing contained in this sub-section shall apply in respect of an assessee whose total turnover exceeds an amount of forty lakh rupees in the previous year.

Sunali

Sunali (Querist)

06 September 2008 thx sir...but still i haven't got my answer..hw does he record his sales/purchase transaction in books if his turnover exceeds Rs. 40 lakh.as most of the transactions includes nominal amounts..

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

06 September 2008 I SEE TWO ALTERNATIVES FOR THIS ISSUE

1.TURNOVER EXCEEDS 40 LAKHS WHICH MEANS HE CAN AFFORD AN ACCOUNTANTS SERVICE.

2.NOW A DAYS USER FRIENDLY SOFTWARES ARE AVAILABLE BY WHICH ATLEAST PURCHASE AND SALE FIGURES CAN BE GENERATED.

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