ITR Filing 2026: As the income tax return (ITR) filing season for the assessment year (AY) 2026-27 gathers pace, taxpayers should not only focus on filing their returns on time but also ensure they have
complied with the bookkeeping and audit requirements prescribed under the income tax rules.
While salaried individuals generally do not need to maintain detailed books of accounts, businesses and professionals crossing specified income or turnover limits are required to maintain books and, in certain cases, get their accounts audited before filing their ITR.
Here’s a detailed look at who is required to maintain books of accounts and who must undergo a tax audit.
Who Needs To Maintain Books Of Accounts?
The Income Tax Act mandates certain taxpayers engaged in business or profession to maintain books of accounts to enable the Assessing Officer to compute their taxable income.
For Specified Professionals
Professionals engaged in the following notified professions are required to maintain prescribed books of accounts if their gross receipts exceed Rs 1.5 lakh in any of the three immediately preceding previous years. In the case of a newly established profession, the requirement applies if gross receipts are expected to exceed Rs 1.5 lakh during the year.
The specified professions include legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, authorised representatives, film artists, company secretaries, and information technology professionals.
Such professionals are required to maintain records such as cash books, journals, ledgers, bills, vouchers and other prescribed documents.
For Other Professionals
Professionals not covered under the notified list are required to maintain books if income from profession exceeds Rs 2.5 lakh, or gross receipts exceed Rs 25 lakh in any one of the three immediately preceding previous years.
For Businesses
Any person carrying on business is required to maintain books of accounts if income exceeds Rs 2.5 lakh, or total sales, turnover or gross receipts exceed Rs 25 lakh in any one of the three preceding previous years.
For newly set-up businesses or professions, books are required if these limits are expected to be exceeded during the financial year.
Who Needs to Get Accounts Audited?
Apart from maintaining books, certain taxpayers are also required to get their accounts audited under Section 44AB of the Income Tax Act. A tax audit must be completed before the due date of September 30, and the audit report must be furnished electronically.
The audit requirement generally applies in the following cases:
Businesses
A business taxpayer is required to get accounts audited if total sales, turnover or gross receipts exceed Rs 1 crore during the financial year. However, this limit is increased to Rs 10 crore if cash receipts do not exceed 5% of total receipts and cash payments do not exceed 5% of total payments.
Professionals
A person carrying on a profession is required to get accounts audited if gross receipts exceed Rs 50 lakh during the financial year.
Presumptive Taxation Cases
Taxpayers opting for presumptive taxation under Sections 44AD, 44ADA or 44AE enjoy simplified compliance. However, a tax audit may become applicable if a taxpayer declares income lower than the prescribed presumptive income and total income exceeds the basic exemption limit.
Failure to maintain prescribed books of accounts or get accounts audited where applicable may attract penalties under the Income Tax Act. It may also create difficulties during assessment proceedings if the tax department seeks supporting records.
