Books of account and records may be maintained for six years

The Federal Board of Revenue (FBR) will make it mandatory for the taxpayers, earning income from business, to maintain books of account, documents and records for a period of six years as compared to existing five years. In this regard, the FBR has proposed amendments in the Income Tax Rules, 2002 through an S.R.O. 1149(I)/2015 issued here on Monday.
Through this amendment, the books of account, documents and records to be maintained for six years after the end of the tax year to which they relate. However, the condition of maintaining books of accounts for six years shall not apply where any proceeding under the Income Tax Ordinance is pending before any authority or court the taxpayer shall maintain the record till final decision of the proceedings. Under rule 29 of the said rules, 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 utilisation of materials, labour and other inputs. If a taxpayer uses fiscal electronic cash register or computerised accounting software, it may issue cash-memo/invoice/receipt generated by the electronic cash register or computer. Duplicate copies and electronic or computer records of the cashmemo / 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.