Sec.44aa

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 April 2014 sir/mam,
in sec44AA it is specified that for specified profession maintenance of accounts is necessary , if the gross receipt in all the 3 preceding years exceed 150000 ,what will happen in case if profession was started 2 years ago

smriti srivastava

smriti srivastava (Expert)
Follow

29 April 2014 In case Profession is newly set up then gross receipt of that in the profession for that year is taken into consideration.So in yiur case Receipt of Rs 150,000 in the two year immediately prceeding PY will be taken into consideration

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

30 April 2014 bt mam it means for the first years it is always necessary to maintain the books of accounts

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
Follow

23 July 2025 ### **Section 44AA – Maintenance of Books of Accounts for Professions**

Under **Section 44AA** of the Income Tax Act, individuals engaged in **specified professions** are required to maintain books of accounts under certain conditions. The section specifies the following criteria regarding the **maintenance of accounts** for professionals:

1. **Specified Professions:**

* The specified professions include **legal**, **medical**, **engineering**, **accountancy**, **technical consultancy**, **interior decoration**, **or any other profession** as notified by the government.

2. **Threshold for Maintenance of Books of Accounts:**

* **Books of accounts** are required to be maintained if the **gross receipts or turnover** exceed **Rs. 1.5 lakh** in any of the **three preceding financial years**.

---

### **What Happens if the Profession is New?**

* If a profession is **newly set up** and has been **operating for less than three years**, the gross receipts for the **first year of operation** will be considered to determine whether books need to be maintained.

* In the first **year** of the profession's operation, the **gross receipts** for that year alone are considered.

* If the **gross receipts** in the **first year** exceed **Rs. 1.5 lakh**, books of accounts **must be maintained**.
* For the next **year**, the receipts for both the **first year and the second year** will be considered to determine if books need to be maintained.
* If the combined receipts for the **two preceding years** exceed **Rs. 1.5 lakh**, books of accounts **must be maintained**.

---

### **Clarification Regarding the First Year of Operation:**

If a profession was **started two years ago**:

* **For the first year**, you consider the **gross receipts of that year** alone.
* If in **both the first and second years**, the **gross receipts exceed Rs. 1.5 lakh** (cumulative), then books of accounts need to be maintained.

However, if the gross receipts in the **first year** do **not exceed Rs. 1.5 lakh**, and the receipts in the **second year** do **not exceed Rs. 1.5 lakh**, books of accounts are **not necessary** to be maintained.

---

### **Key Point:**

* **For new professions**, **gross receipts** in the **first year** are considered. If this threshold is exceeded, then the maintenance of books is required, and this applies to subsequent years as well.

If the profession was newly set up **within the last two years**, and the **gross receipts for the first two years** exceed Rs. 1.5 lakh cumulatively, you are **required to maintain books of accounts**.

---

### **Summary**:

If a profession is newly set up:

* **In the first year**, check if receipts exceed **Rs. 1.5 lakh**. If yes, books must be maintained.
* **In the second year**, check receipts for both years combined. If they exceed **Rs. 1.5 lakh**, books must be maintained.

I hope this clears up your query! Let me know if you need more details or further clarification.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now