Indian businesses (sole proprietors, partnerships, LLPs, private limited companies, professionals, and freelancers above specified thresholds) must maintain proper financial records — cash book, ledger, journal, sales/purchase registers, bank reconciliation statements, fixed asset register, salary/wages register, stock register, and GST records — under the Companies Act 2013, Income Tax Act 1961, and CGST Act 2017. Electronic record-keeping is explicitly permitted (Companies (Accounts) Rules 2014, Rule 3; Income Tax Rules 2026, Rule 46(8)). Since 1 April 2023, companies must use accounting software with a functioning audit trail (edit log) for every transaction, and statutory auditors must report on whether this audit trail feature is enabled.
Required records: cash book, ledger, journal, sales/purchase registers, bank reconciliation, fixed asset register, salary/wages register, stock register, GST records.
Electronic bookkeeping is explicitly permitted under Companies (Accounts) Rules 2014 and Income Tax Rules 2026.
Since 1 April 2023, companies must use accounting software with a functioning audit trail (edit log) for every transaction.
Statutory auditors must specifically report on whether the company's accounting software audit trail feature is enabled and functioning.
Required Documents
Cash book, ledger, journal
Sales and purchase registers
Bank reconciliation statements
Fixed asset register
GST records
Common Mistakes
Using accounting software without a functioning audit trail (edit log) feature — mandatory since 1 April 2023 and specifically checked by statutory auditors.
Assuming bookkeeping obligations apply only to companies — sole proprietors, partnerships, and freelancers above certain thresholds are also required to maintain proper records.