Accounting Outsourcing Services

What are the documents/ info needed for Accounting?

 

The documents required for bookkeeping and accounting vary depending on the nature of your business & transactions. Our advisors will explain the list to you.

Usually, we need Sales, Purchase, and expense details. Monthly bank statement in Excel format with remarks.

 

Which Accounting Software is to be used for accounting?

We are currently using Tally, ZohoBooks, and Quickbooks for accounting. Usually, we use our licensed Tally/ Tally on Cloud to prepare and maintain the client's records.

We provide MIS reports and financials. Also, provide the last data backup (Tally) of your accounts as part of the service plan. The plan does not include access to or a license for the software.

If you have your own accounting software, then we can utilize it as long as it can be accessed remotely. Our accountant will log in and set up your accounts as soon as you grant us access to your software.

Maintenance of books of accounts under Income Tax

Section 44AA (1) - Maintenance of books of account by persons carrying on certain professions

As per section 44AA(1) read with rule 6F the persons carrying on any of the professions as mentioned below are required to maintain books of accounts and other documents as may enable the assessing officer to compute his total income, if yearly gross receipts of the profession exceeded  Rs 1,20,000.

The following professions are covered under this provision:

• Legal
• Medical
• Engineering
• Architectural
• Accountancy
• Technical consultancy
• Interior decoration
• Authorized Representative (one who charges fees for representing someone before the tribunal or any authority)
• Film artists (such as producers, editors, actors, directors, music directors, art directors, dance directors, cameramen, singers, lyricists, story writers, screenplay or dialogue writers, and costume designers).
• Company Secretary

 

Books of accounts as per Rule 6F

The following books of account are to be kept and maintained by persons covered u/s 44AA(1):

1. a cash book;
2. a journal;
3. a ledger
4. carbon copies of bills (serially numbered) and carbon copies or counterfoils of receipts issued in respect of sums exceeding Rs 25,
5. Original bills for expenses exceeding Rs. 50 and payment vouchers for petty expenses.

However in a case where the cash book maintained by the person contains adequate particulars in respect of the expenditure incurred, then vouchers are not necessary in respect of expenses up to Rs 50.

Note: Persons engaged in the medical profession are, in addition to the above set of books, required to maintain:

• a daily case register in Form No. 3C; and
• an inventory, as at the beginning and end of the year, of stock of drugs, medicines, and other consumables accessories used for the purpose of the profession.

 

Maintenance of Books of account in electronic form

Maintenance of Books of account and other books and papers in electronic mode is permitted and is optional. Such books of accounts or other relevant books or papers maintained in electronic mode should be and shall remain accessible in India.

 

Duration for which the books are required to be preserved

Rule 6F(5) provides that the books of accounts and other documents are to be kept and maintained for at least 6 years from the end of the relevant assessment year.

Penalty for not maintaining books of accounts

Consequences for not maintaining books of accounts and other documents or retaining them as required u/s 44AA attract a penalty of Rs. 25000 u/s 271A. The penalty can be imposed by the assessing officer or CIT (Appeal).

 

Maintenance of Books of accounts by other Persons covered u/s 44AA (2)

(i) Every person carrying on any business or profession other than a specified profession mentioned U/s 44AA(1) shall maintain books if:- either the income from business or profession exceeds Rs 120000 or the turnover or gross receipts exceed Rs 10 Lakhs in any one of the three years immediately preceding the previous year(PY).

(ii) If the business/profession is newly set up in any previous year, and income is likely to exceed Rs 1.20 lakhs or turnover is likely to exceed Rs 10 lakhs during the PY. For individual/HUF, the above Rs 1.20 lakhs and Rs 10 lakhs are substituted with Rs 2.5 lakhs and Rs 25 lakhs, respectively.

 

Maintenance of Books of Accounts under Companies Act

As per the Companies Act, every company has to maintain books of accounts, at the registered office or any office that the board of directors may decide.

If the company is maintaining books at an office other than the registered office, it has to intimate the same to RoC (Registrar of Companies).

 

Maintenance of Books of account in electronic form

Maintenance of Books of account and other books and papers in electronic mode is permitted and is optional. Such books of accounts or other relevant books or papers maintained in electronic mode should be and shall remain accessible in India.

Duration for which the books need to be maintained

Books of accounts and vouchers should be maintained for a period of 8 years from the end of the relevant financial year.

List of Books of accounts to be maintained

• Cash flow statement
• Records of sales and purchases
• Records of assets and liabilities
• Items of cost
• Deeds, vouchers, writing, documents, minutes, and registers whether in physical or electronic mode

Books of Accounts under the GST Act

 

Section 35 of the CGST Act and “Accounts and Records” Rules (hereinafter referred to as rules) provide that every registered person shall keep and maintain all records at his principal place of business.

It has cast the responsibility on the owner or operator of the warehouse or godown or any other place used for storage of goods and on every transporter to maintain specified records.

 

List of accounts & records to be maintained

As per Section 35(1) of the CGST Act, every registered person shall keep and maintain, at his principal place of business, a true and correct account of-

• Production or manufacture of goods;
• Inward or outward supply of goods or services (Sales and Purchase Registers)
• The stock of goods (Stock register);
• Input tax credit availed (Electronic credit ledger);
• Output tax payable and paid;
• Such other particulars as may be prescribed.
• goods or services imported or exported or
• supplies attracting payment of tax on reverse charge
• along with the relevant documents,
• including invoices, bills of supply, delivery challans, credit notes, debit notes, receipt vouchers, payment vouchers, refund vouchers, and e-way bills.

True and correct means the financial statements should be free from material misstatements and faithfully represent the financial performance and position of the entity.

 

Manner of maintenance of accounts and records under GST

The records can be maintained electronically, and businesses are encouraged to use accounting software that complies with GST requirements. In such cases, such records have to be authenticated digitally.

Retention period of accounts under GST

Every registered person/business should retain the books of accounts and other relevant records for a minimum of 6 years (72 months) from the due date for filing the Annual Return for the year.