Retention of accounting records under various Indian Laws.

//Retention of accounting records under various Indian Laws.
Business Registration Service At Finegral

Companies Act , 2013

  • A normal company is required to maintain its books of account and vouchers for a period of 8 years immediately preceding the current year.
  • The books and papers of the Amalgamated/Transferor Company must be not be disposed of without the prior permission of the Central Government.
  • The books and papers of a company which has been wound-up and of its liquidator shall not be destroyed for a period of 5 years from the date of its dissolution. They may be destroyed earlier with prior Central Government permission.
  • Every Company (not being an NBFC) accepting public deposits must maintain a Register of deposits for 8 calendar years from the financial year in which the latest entry is made in the Register.
  • The Register and Index of Members must be maintained permanently.
  • The Register and Index of debenture-holders must be maintained for 15 years after the redemption of debentures.
  • The copies of all Annual Returns and Certificates annexed thereto must be maintained for 8 years from date of filing with the ROC.

Income tax Act, 1961

  • Assessees are required to preserve the specified books of account for a period of 6 years from the end of the relevant assessment year, i.e., for a total period of 8 previous years. Thus, as of April 2019 accounts must be maintained for P.Y. 2011-12 and onwards and accounts up to 31st March, 2011 (P.Y. 2010-11) need not be maintained for income-tax purposes.
  • Period of six years gets extended if the assessment is reopened u/s. 147, till the time assessment is completed.
  • Transfer Pricing documents and information specified under Rule 10D must be maintained for a period of 8 years from the end of the relevant assessment year, i.e., for a total period of 10 previous years.
  • In a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax has escaped assessment for any assessment year — 16 years from the end of relevant assessment year.

Goods and Services Tax

  • As per the GST Act, every registered taxable person must maintain the accounts books and records for at least 72 months (6 years). The period will be counted from the last date of filing of Annual Return for that year. The last date of filing the Annual return is normally 31st December of the following year.
  • If the taxpayer is a part of any proceedings before any authority (First Appellate) or is under investigation then he must maintain the books for 1 year after the order of such proceedings/appeal has been passed.

Central Excise

  • Records including books of account and source documents and data in any electronic media must be maintained for 5 years immediately after the financial year to which such records pertain.

Service Tax

  • Records including books of account and source documents and data in any electronic media must be maintained for 5 years immediately after the financial year to which such records pertain.

Maharashtra Value Added Taxes

  • Every Registered Dealer must preserve all books of account, registers and other documents pertaining to stocks, purchases, dispatches and deliveries of goods, payment made and receipts towards sale or purchase of goods for a period of not less than 8 years from the expiry of the year to which they relate.
  • In case where any proceedings are initiated, then the dealer shall preserve books, till a final order is passed in respect of the said proceedings.

In summary for a person in business subject to fine lines as mentioned above , the records should be maintained for 8 financial years , before the current financial year. So for if we are in FY 2019-20 , we need to retain records for 2011-12 and onwards. Subject to special cases as mentioned above.

Also in case of digital records it is advisable ( although not mandatory) that all the records should be archived forever, for easy referencing and retrieval at a later stage.

This summary is for general use and not a specific advisory. For your own business please obtain a case specific consulting from the subject expert.