Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
If you use 44ADA
On 44ADA you’re spared detailed books, but you should still keep proof of gross receipts — bank statements, UPI/card settlement records, and a simple fee register. The 50% is computed on receipts, so you must be able to substantiate the receipts figure if asked.
If you maintain books
If you’re outside 44ADA (actual computation or over the audit limit), keep proper books: a receipts/fees ledger, expense vouchers (rent, staff, consumables), the fixed-asset register with depreciation, and bank statements reconciled to the books. These support every deduction you claim. Retain records for the statutory period (usually 6-8 years).
A worked example
Example: a 44ADA doctor keeps bank statements and a receipts summary — enough. A clinic owner declaring actual income keeps full ledgers, equipment invoices for depreciation, and salary records — so each expense survives scrutiny. When the department issues an AIS-based query, clean records resolve it quickly. Our team can set up the right record-keeping for your practice.