We’ll continue today from our previous posts on taxes for a home tutor. Let’s understand whether the law requires you to maintain accounting records.
Do note that we will conclude this series today, but if you have questions or need clarity on any related topic comment or write to us firstname.lastname@example.org
If your income does not exceed Rs 1,20,000 or your total receipts are not more than 10,00,000 in 3 preceding years — no books of account are required to be maintained. In case of a newly set up work the same rule applies for the first year – if income is expected to be less than Rs 1,20,000 or gross receipts are expected to be less than Rs 10,00,000, you are not required to maintain any books of accounts.
Where the income is more than Rs 1,20,000 or total sales, turnover or gross receipts are more than 10,00,000 in all preceding 3 years, such a business or tutor must maintain books of accounts and other documents which may enable the Assessing Officer to calculate their taxable income as per the Income Tax Act. Though, no specific records are prescribed.
From AY 18-19, the limit of Rs. 120,000 has been increased to Rs. 250,000 and Rs. 10,00,000 to 25,00,000.
As a start its a good idea to keep a record of all your receipts with dates/months and amounts. You can also start maintaining a register or an excel file which has all your expenses listed out. This will be helpful at the time of filing your return. This is the bare minimum record keeping which you must maintain irrespective of your income or receipts.
Need help with maintaining accounting records? Reach out to us and we’ll help you with it.