Accounting is the process of preparation of books of accounts at the end of the accounting period, which helps a businessman to estimate the net assets and liabilities, net profit, and even the net worth of the business. According to section 2(13) of the companies act “books of account” includes but is not limited to:
Bookkeeping |
Accounting |
Bookkeeping is the first stage of accounting. |
Accounting is the use of information as provided in the books of accounts for the preparation of the financial statements of the company. |
Bookkeeping is a part of the accounting system. |
Accounting is a broader scope than bookkeeping. |
The objective behind bookkeeping is to help in the preparation of accounting |
The objective behind accounting is to make informed decisions and judgments based on financial statements. |
Every company has to maintain all the financial statements with all the relevant documents at its registered office. The books of accounts may also be kept at any other place in India by passing a resolution by the Board of Directors.
Every company shall preserve their books of accounts for 8 years immediately preceding the current year from the end of the current financial year. If the company has not been in existence for less than 8 years, then for the whole life of the existence of the company.
An accounting standard is a set of principles, standards, and procedures that forms the systematic bookkeeping and other accounting functions in the firm over the year. Indian Accounting Standard is the Accounting standard adopted by companies in India and issued under the supervision of the Accounting Standards Board (ASB) which is a committee under the Institute of Chartered Accountants of India (ICAI) which consists of representatives from the government department, academicians, other professional bodies, etc. National Financial Reporting Authority (NFRA) recommend these formulations of accounting standards to the Ministry of Corporate Affairs (MCA)
Accounting and bookkeeping can prove to be tedious and confusing tasks. Therefore it is advisable to outsource rendering bookkeeping to a firm rendering professional services.
Every taxpayer to keep a set of books of account, to be kept and maintained in its registered office of the business or at any place as decided by the director
Every company shall preserve their books of accounts for 8 years immediately from the end of the current financial year. If the company has not been in existence for 8 years, then for the whole life till the existence of the company.
If the business fails to keep or maintain the books of accounts, such person shall be liable to pay the penalty under section 271A to the extent of INR 25,000.
The rate of surcharge is 7% in case the total income lies between one crore rupees to Rs 10 crore and 12% if the total income exceeds Rs 10 crore.
Sections |
Tax rate |
Surcharge |
Section 115BA (Companies having turnover up to Rs 400 crores in FY 2017-18) |
25% |
7%/12%* |
Section 115BAA |
22% |
10% |
Section 115BAB |
15% |
10% |
Any other case |
30% |
7%/12%* |
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