- Maintenance of Books of Accounts – A Practical Guide
India’s direct tax is set for a major transformation with the transition from the Income Tax Act, 1961 to the Income Tax Act, 2025, effective from 1 April 2026. The requirement to maintain books of account, earlier governed under Section 44AA read with Rule 6F of the old law, will now be consolidated under Section 62 read with Rule 46 of the new law.
The new law mainly introduces procedural and structural refinements rather than substantive changes. The prescribed books—such as cash book, journal, ledger, bills, and specific registers—remain the same, but digital/electronic records are now formally recognized.
Additional clarity has been provided on maintenance requirements for medical professionals, location and accessibility of books (especially electronic records requiring Indian server backup), and retention period (aligned to 7 tax years). Penalties for non-compliance continue at ₹25,000, with only the governing section changed. Overall, the shift emphasizes modernization, digital compliance, and better record accessibility without significantly altering the existing compliance burden.
To read the detailed analysis and understand the implications of these changes, click here.
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