All About Section 44AA of Income Tax Act 1961

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Maintenance Books of Accounts by certain persons carrying on Business or profession of Income Tax Act 1961. These have prescribed under section 44AA. Here you can know about  Section 44AA of Income Tax Act 1961

Section 44AA of Income Tax Act 1961

The Income from the business of profession exceeds rs 120000 (or) the turnover gross receipts exceed 1000000 in any of previous 3 years (Till the Financial year 2016-17). The limits of the above said provisions have been Increased to 150000 (or) 2500000 respectively from F.Y.2017-18

 If the Assessee had satisfied the above-said limits then the Individual, Company or Firm has to Maintained books of accounts the above-said limits will not be applicable to the following Assessee legal, medical, Engineering, Accounting,  Technical consultancy, Interior Decoration and other that may be prescribed by CBDT.

Difference between Section 44aa and 44ad

Section 44AASection 44AD
Books are to be maintainedBooks need not  be maintained
Tax Computed on the Income that was prepared by maintaining all booksA given specified rate is considered as income tax
All Assess are Under the roof above the threshold limitA given and specific assesses can option for sec 44AD

Prescribed Books:

In case of Specified Profession if Gross Receipts exceed Rs.150000/- in all 3 years immediately preceding previous year.

Any Books of Accounts:

  •  In case of Specified Profession if Gross Receipts are less than 150000/- in any of 3 years immediately preceding previous year then assessee has to maintain books of accounts.
  • In case of Non-Specified Profession if Total income exceeds Rs.120000/- or Gross Receipts exceed Rs .1000000/- in any of 3 years immediately preceding previous year.
Assessees covered u/s 44ADA/44AF/44BB/44BBB are also required to maintain books if they claim that their income will be less than the limit specified in the respective section. e.g. u/s 44 ADA limit is 50% of Gross Receipt.

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