# BOOKS OF ACCOUNTS

If you run a business, it is crucial to know when you must prepare books of accounts. According to income tax laws, you are required to do so if you meet any one of the following conditions:

1. Turnover Threshold: If the combined turnover of all your businesses (excluding those under the presumptive taxation scheme) exceeds Rs. 25 Lakhs in any financial year within the last three financial years. For a new business, this limit must be checked in the current year.

Or

2. Profit Threshold: If the combined profits of all your businesses (excluding those under the presumptive taxation scheme) exceed Rs. 2.5 Lakhs in any financial year within the last three financial years. For a new business, this limit must be checked in the current year.

Or

3. Opting Out of Presumptive Taxation: If you previously chose the presumptive taxation scheme but opted out within the next five years, and in each of those years, your total income exceeds the basic exemption limit. Note, the total income refers to the taxpayer's total income, not just business income.

# Notes & Conclusion

1. Multiple Businesses: The Rs. 25 Lakhs or Rs. 2.5 Lakhs limits apply to the combined turnover or profits of all businesses, excluding those under the presumptive scheme.

2. Applicable Limits: These limits (Rs. 25 Lakhs or Rs. 2.5 Lakhs) are applicable only for Individuals and Hindu Undivided Families (HUF).

3. Other Taxpayers: For taxpayers other than Individuals or HUF, the limits are Rs. 10 Lakhs for turnover and Rs. 1.2 Lakhs for profits.