Tax Audit: Clause 11 of Form 3CD

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  • Last Updated on 28 November, 2022
Form No. 3 CD is the format of Tax Audit Report to be filed by Tax Auditors. It is divided into 44 clauses that provide disclosure of different financial as well as non-financial items. Clause No. 11 of form 3CD requires the information regarding the maintenance of Books of Accounts by the assessees covered under section 44AA.

Disclosure required under clause 11:

1. Disclosure required only when assessee covered under Section 44AA:

Clause 11(a):-  

Disclosure of the list of Books of account prescribed under Rule 6F is to be made under this clause

2. Disclosure to be made in case of all assessees:

Clause 11(b):-

Disclosure regarding following are to be made under this sub-clause:-

    • List of books of account maintained
    • Address at which the books are kept
In case books are kept in Computer system, disclose all the books of account generated by such computer system. 
If the books of account are maintained at more than one place disclosures are to be made regarding such locations as well as details of all books of account maintained at such places.

Clause 11(c):- 

Following disclosures are to be made under this sub-clause

  • List of books of account and their locations thereof;
  • Nature of relevant documents examined;
  • Nature of all the relevant documents on the basis of which such audit was conducted

Taxmann's Tax Practice Manual Book

Applicability of Sec 44AA:

The following table enlists the cases wherein maintenance of books of accounts is mandatory.

Nature of Business or Profession

Category of Taxpayer

Threshold Limits for Income

Threshold Limits for Gross Turnover or Receipts

Specified Professions*

Any

Mandatory in every case except when presumptive taxation scheme under Sec. 44ADA is opted by the assessee

Non-Specified Professions

Individual or HUF

Rs. 2,50,000

Rs. 25 lakhs in any of the 3 years immediately preceding the previous year

Non-Specified Professions

Others

Rs. 1,20,000

Rs. 10 lakhs in any of the 3 years immediately preceding the previous year

Business

Individual or HUF

Rs. 2,50,000

Rs. 25 lakhs in any of the 3 years immediately preceding the previous year

Business

Others

Rs. 1,20,000

Rs. 10 lakhs in any of the 3 years immediately preceding the previous year

Presumptive Tax Scheme under Sec. 44AD

Resident Individual or HUF

Rs. 2,50,000

Taxpayer opted for scheme in any of last 5 previous years but does not opt for in current year.

Presumptive Tax Scheme under Sec. 44AD

Resident Partnership Firm

Taxpayer opted for scheme in any of last 5 previous years but does not opt for in current year.

Presumptive Tax Scheme under Sec. 44AE

Any Assessee engaged in plying, hiring or leasing goods carriage

Taxpayer claims that his profits are lower than the deemed profits.

Presumptive Tax Scheme under Sec. 44BB

Non-resident assessee engaged in exploration of mineral oil

Taxpayer claims that his profits are lower than the deemed profits.

Presumptive Tax Scheme under Sec. 44BBB

Foreign Co. engaged in civil construction

Taxpayer claims that his profits are lower than the deemed profits.

* List of Specified professions:-

1. Legal
2. Medical
3. Architectural
4. Accountancy
5. Technical consultancy
6. Interior decoration
7. Engineering
8. Film artist
9. Company secretary
10. Authorized representative
11. Or any other profession that is notified 

Any other profession that is not notified or is not in the list of specified profession are covered under non-specified profession.

List of books of account to be maintained under Rule 6F:-

Rule 6F prescribes maintenance of following books of account for the persons carrying out any specified profession whose gross receipts exceed Rs. 1,50,000/-

1. Cash Book: Book recording all the cash transactions for the period.

2. Journal: Journal should be maintained recording day to day transactions of the assessee as per the mercantile accounting system.

3. Ledger: Ledger where all entries flow from the journal, has detailed accounts, this can be used to prepare financial statements.

4. Original bills and xerox copy thereof. Following are the additional requirements in case of a person carrying on medical profession:-

  • Daily cash register in Form 3C which records details of patients, services rendered, fees received and date of receipt.
  • An inventory as on the first and last day of the previous year, of the drugs, medicines and other consumable used.

Tenure to maintain Books of Account:

These books are required to be maintained and kept for a period of 6 years from end of Assessment year to which the accounts belong.

Read Clause 9 to 41 of Form 3CD:
Detailed Analysis of Clause 9 to 12
Detailed Analysis of Clause 13 and Clause 14
Detailed Analysis of Clause 15 and Clause 16
Detailed Analysis of Clause 17 to Clause 19
Detailed Analysis of Clause 20 and Clause 21
Detailed Analysis of Clause 22 to Clause 25
Detailed Analysis of Clause 26 to Clause 29
Detailed Analysis of Clause 30 to Clause 30C
Detailed Analysis of Clause 31
Detailed Analysis of Clause 32 to Clause 34
Detailed analysis of Clause 35 to Clause 38
Detailed Analysis of Clause 39 to Clause 41
Detailed Analysis of Clause 42 to Clause 44

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