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Legal Requirements of Accounting and Mainting Books of Accounts in India

A. Under Income Tax Act

• As per Section 44AA of Indian Income Tax Act Books of Accounts required to be maintained by specified person.
• Under Section 44AB, Tax Audit is compulsory if turnover exceeds specified limit of Rs 25 Lakhs/ 1 crore / 2 Crores of the business entity. For that Books of Accounts required to maintain.

B. Under the Companies Act 2013

• Every company shall prepare and keep at its registered office books of account and other relevant books and papers and financial statement for every financial year which give a true and fair view of the state of the affairs of the company, including that of its branch office or offices, if any, and explain the transactions effected both at the registered office and its branches and such books shall be kept on accrual basis and according to the double entry system of accounting as per Section 128(1). 
• File Audit report Balance Sheet and Profit & Loss Statement annually with ROC.
• Also has to Comply Accounting Standards as issued by The Institute of Chartered Accountants of India.
• Books of Accounts shall preserve for a minimum period of 8 years.
• Non Compliance Penalty - If the managing director, the whole-time director in charge of finance, the Chief Financial Officer or any other person of a company charged by the Board with the duty of complying with the provisions of this section, contravenes such provisions, such managing director, whole-time director in charge of finance, Chief Financial officer or such other person of the company shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees or with both as per section 128(6).

C. Under GST Act

Section 35 provides that every registered person shall keep and maintain, a true and correct account of

• Invoices, Debit note, Credit note.
• Production or manufacture of goods ( for manufacturing unit)
• Inward and outward supply of goods or services or both
• Stock of goods
• Input tax credit availed
• Output tax payable and paid and
• goods or services imported or exported
• Such other particulars as may be prescribed

Legal Requirements of Accounting and Mainting Books of Accounts in India

A. Under Income Tax Act

• As per Section 44AA of Indian Income Tax Act Books of Accounts required to be maintained by specified person.
• Under Section 44AB, Tax Audit is compulsory if turnover exceeds specified limit of Rs 25 Lakhs/ 1 crore / 2 Crores of the business entity. For that Books of Accounts required to maintain.

B. Under the Companies Act 2013

• Every company shall prepare and keep at its registered office books of account and other relevant books and papers and financial statement for every financial year which give a true and fair view of the state of the affairs of the company, including that of its branch office or offices, if any, and explain the transactions effected both at the registered office and its branches and such books shall be kept on accrual basis and according to the double entry system of accounting as per Section 128(1). 
• File Audit report Balance Sheet and Profit & Loss Statement annually with ROC.
• Also has to Comply Accounting Standards as issued by The Institute of Chartered Accountants of India.
• Books of Accounts shall preserve for a minimum period of 8 years.
• Non Compliance Penalty - If the managing director, the whole-time director in charge of finance, the Chief Financial Officer or any other person of a company charged by the Board with the duty of complying with the provisions of this section, contravenes such provisions, such managing director, whole-time director in charge of finance, Chief Financial officer or such other person of the company shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees or with both as per section 128(6).

C. Under GST Act

Section 35 provides that every registered person shall keep and maintain, a true and correct account of

• Invoices, Debit note, Credit note.
• Production or manufacture of goods ( for manufacturing unit)
• Inward and outward supply of goods or services or both
• Stock of goods
• Input tax credit availed
• Output tax payable and paid and
• goods or services imported or exported
• Such other particulars as may be prescribed