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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 June 2010 My friend has business income with gross receipts 140000. so will it be necesary for him to mainatain books of accounts?
(Since his gross receipts esxceeds 120000)
What if he files return without maintaining books of a/c..?
and should he fill up ITR as Account case or as No ACCOUNT CASE...?
Pls reply

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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30 June 2010 aS PER sECTION 44AA, THERE IS NO NEED TO MAINTAIN BOOKS OF ACCOUNT IF GROSS RECEIPT IS LESS THAN RS.10 LAC.
PLEASE READ BELOW CAREFULLY.
rS.120000/- FOR INCOME FROM BUSINESS NOT FOR GROSS RECEIPT.

Maintenance of accounts by certain persons carrying on profession or business.

3544AA. (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 as is notified36 by the Board in the Official Gazette shall keep and maintain such books of account and other documents as may enable the 37[Assessing] Officer to compute his total income in accordance with the provisions of this Act.

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

(i) if his income from business or profession exceeds 38[one lakh twenty] thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession exceed or exceeds 39[ten lakh] rupees in any one of the three years immediately preceding the previous year; or

(ii) where the business or profession is newly set up in any previous year, if his income from business or profession is likely to exceed 40[one lakh twenty] thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession are or is likely to exceed 41[ten lakh] rupees, 42[during such previous year; or

(iii) where the profits and gains from the business are deemed to be the profits and gains of the assessee under 42a[section 44AD or section 44AE or section 44AF] 43[or section 44BB or section 44BBB], as the case may be, and the assessee has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, during such 43a[previous year,]]

The following clause (iv) shall be inserted after clause (iii) of sub-section (2) of section 44AA by the Finance (No. 2) Act, 2009, w.e.f. 1-4-2011 :

(iv) where the profits and gains from the business are deemed to be the profits and gains of the assessee under section 44AD and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his business and his income exceeds the maximum amount which is not chargeable to income-tax during such previous year,

keep and maintain such books of account and other documents as may enable the 44[Assessing] Officer to compute his total income in accordance with the provisions of this Act.

(3) The Board may, having regard to the nature of the business or profession carried on by any class of persons, prescribe45, by rules, the books of account and other documents (including inventories, wherever necessary) to be kept and maintained under sub-section (1) or sub-section (2), the particulars to be contained therein and the form and the manner in which and the place at which they shall be kept and maintained.

(4) Without prejudice to the provisions of sub-section (3), the Board may prescribe, by rules, the period for which the books of account and other documents to be kept and maintained under sub-section (1) or sub-section (2) shall be retained.]

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