Requirement of Maintenance of books of Account

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This discussion clarifies the mandatory requirements for maintaining books of account for UK taxpayers. Generally, books are compulsory if gross business receipts exceed £250,000 or income surpasses £25,000 in any of the three preceding years. For newly established businesses, these limits are £250,000 and £200,000 respectively in the first year. However, commission income below £250,000 and speculative income below the specified thresholds may not require mandatory book maintenance.

RAJA SINGH

RAJA SINGH (Querist)

26 May 2021 Requirement of Maintenance of books of Account for an assessee carrying on Income from Commission Turnover above 2.5 lacs & another assessee having Income from Speculative Activity Rs. 6485/-

Ganeshbabu K

Ganeshbabu K (Expert)

26 May 2021 Commission income cannot be offered under section 44AD so maintaining books of accounts mandatory if want to claim expenditure against income

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

27 May 2021 * If the gross receipts from the business is more than Rs. 25,00,000 or the income from business is more than Rs. 2,50,000 in any of the 3 preceding years, then books of accounts is compulsory OR

*where the business is newly set up in the previous year, if his income from business is exceeded two lakh fifty thousand rupees or his gross receipts in business is likely to exceed twenty five lakhs rupees, during such previous year, books of accounts is mandatory.

In the cited issues -
+ the commission being the gross receipts, books of accounts is not mandatory.

+ the person doing speculation need not maintain books compulsorily since gross receipts and income is below the limits as in section 44AA.

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