Can Company (Pvt Ltd) follow cash basis system

Can a private limited company kept its books of account in a cash basis.
Replies (4)
Quick Summary
Generally, private limited companies in the UK are required by the Companies Act to follow the accrual system of accounting. However, there can be specific circumstances or interpretations where a cash basis might be considered, particularly for tax purposes. It's crucial for companies to clearly declare their chosen accounting basis in their annual accounts to ensure consistency and compliance.

company-follow-cash-accounting-system-tax-purposes-section-209(3)-companies-act-mandates-accrual system

there is a case record of this in DCIT Vs Stup Consultants Pvt. Ltd. You can find the details in tax guru 

Every company must declare its basis of accounting as per notes on accounts.
It must declare in its annual accounts its basis of accounting.
whether it is following cash basis or accrual basis.

The consistency concept also avoids many conflicts and luckily there is no concept as of now which prohibits any transaction. 

Any change must be declared all at once.

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