Guidelines for Persons Carrying on Specified Professions:

In respect of a professional, the income tax authority with the consent of the Central Government has issued certain basic guidelines which are to be complied by the professionals while preparation of their books of accounts for the purpose of filing of return to the tax authority. These guidelines are very simple and precise which reduces the complexities involved in computation of tax liability.

1. Every person carrying on legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, authorized representative, film artist, company secretary and information technology is required to keep and maintain the books of account and other documents specified in rule 6F as follows:
2. A cash book ;
3. A journal, if the accounts are maintained according to the mercantile system of accounting ;
4. A ledger ;
5. Carbon copies of bills for sums exceeding Rs. 25, wherever such bills are issued by the person and carbon copies of counterfoils of machine numbered or otherwise serially numbered receipts issued by him ;
6. Original bills wherever issued to the persons and receipts in respect of expenditure incurred by the person or, where such bills and receipts are not issued and the expenditure incurred does not exceed Rs. 50, payment vouchers prepared and signed by the person.

In addition to the above, a person carrying a medical profession is required to keep and maintain the following:

1. A daily cash register in form No. 3C ;
2. An inventory under board heads, as on the first and the last day on the previous year, of the stock of drugs, medicines and other consumable accessories used for the purpose of his profession.
3. Person not required to keep and maintain books of account, etc.: A person carrying on any one or more of the specified profession is not required to keep and maintain the books of account and other documents specified in rules 6f if his total gross receipts in the profession do not exceed Rs. 1, 50,000 in any one of the three year immediately preceding the previous year. However, such assessees are required to keep and maintain such books of account and the other documents as may be enable the Assessing Officer to compute his total income under the income tax Act.

However, according to his decision of Kerala High Court in Keshava Bhat (A) vs. ITO (2001) 247 ITR 83, a person carrying on any specified profession is required to keep and maintain the books of account and other document specified in rule 6F if gross total receipts in the profession exceed Rs. 1, 50,000 in all the three year immediately preceding the previous year.

Thus, we observe the necessary documents which are needed to be maintained by a professional for the purpose of computation of their tax liability. The procedure not only provides a simple base for the purpose of computation of tax liability but also provides a simple and easy way of maintaining the books of accounts on regular basis.

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