Six years mandatory period for maintaining record under income from business

Six years mandatory period for maintaining record under income from business

ISLAMABAD: A taxpayer deriving income from business is required to maintain record of book of accounts for at least six years.

The Federal Board of Revenue (FBR) has updated rules related to book of account, documents and records to be maintained.

Under these rules:

(1) Every taxpayer deriving income chargeable under the head “Income from Business” shall maintain proper books of account, documents and records with respect to-

(a) all sums of money received and expended by the taxpayer and the matters in respect of which the receipt and expenditure takes place;

(b) all sales and purchases of goods and all services provided and obtained by the taxpayer;

(c) all assets of the taxpayer;

(d) all liabilities of the taxpayer; and

(e) in case of a taxpayer engaged in assembly. Production processing, manufacturing, mining or like activities, all items of cost relating to the utilization of materials, labour and other inputs.

(2) If a taxpayer uses fiscal electronic cash register or computerized accounting software. it may issue cash-memo invoice/receipt generated by the electronic cash register or computer.

(3) Duplicate copies and electronic or computer records of the cash-memo invoice receipt patient-slip to be issued under this chapter, shall be retained by the taxpayer and form part of the records to be maintained under this chapter.

(4) The books of account documents and records to be maintained under this chapter shall be maintained for six years after the end of the tax year to which they relate.

(5) The provision of sub rule (4) shall not apply where any proceeding under the Ordinance is pending before any authority or court the taxpayer shall maintain the record till final decision of the proceedings.

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