Where the income does not exceed Rs 2,50,000 or total sales, turnover or gross receipts are not more than 25,00,000 in all preceding 3 years: No Books of Account are required to be maintained. In case of a newly set up profession or business the same rule applies when income is expected to be less than Rs 2,50,000 or sales/turnover/gross receipts are expected to be less than Rs 25,00,000.
For Professions and Businesses covered under section 44AD, 44ADA and 44AE
Businesses covered under section 44AD and 44AE are not required to maintain any books of accounts.However taxpayers who claim that their income from business is lower than (8% Profit of Sales in case of Business, 50% profit of Gross Receipt in case of Professionals) the presumed income calculated under section 44AE must maintain books of accounts as specified in section 44AA and have them audited under section 44AB.
A taxpayer may shifts from presumptive taxation under section 44AD/44ADA to normal taxation to claim that their income from business or profession is lower than the presumed income calculated under section 44AD/44ADA. In such a case, where the income exceeds the basic exemption limit of Rs 2,50,000, books of accounts as required under section 44AA have to be maintained and audited as per section 44AB.
In the case of a taxpayer whose turnover was less than Rs 25 Lakh, but having total income above the maximum amount not chargeable to tax, are excluded from maintenance of books of accounts as per 44AA.
Show Minimum Presumed Profit and Avoid Tax Audit and Books of Account Maintaining.
Min. Profit in 44AD (Business) : 8% of Sales (if Turnover through otherthan Banking Channel) , 6% of Sales (if Turnover is through Banking Channel)
Minimum Profit in 44ADA (Profession) : 50% of Gross Receipt.