Section 128 Books of Account Checklist
Books of account are not just Tally data. Section 128 requires proper books and records, and digital accounting should be audit-ready, backed up and aligned with statutory filings.
Section 128 books of account must be kept at the registered office (or elsewhere only with a Board resolution and a 7-day ROC intimation), preserved for 8 financial years, and if maintained digitally, backed up on servers physically located in India. Reconcile books against GST, TDS and MCA filings monthly rather than only at year-end, since a books-vs-return mismatch is a common trigger for both statutory audit queries and inspection notices.
For broader context, see the Companies Act, MCA and Startup Compliance Hub.
Section 128 base
The official Companies Act PDF contains Section 128 on books of account and other relevant books and papers and financial statement for every company.
The three rules most companies get wrong
- Retention period: books of account, vouchers and relevant papers must be preserved for 8 financial years immediately preceding the current year - not indefinitely, but also not just the current year's files.
- Place of keeping: books must ordinarily be kept at the registered office; keeping them elsewhere is permitted only if the Board passes a resolution and the company files an intimation in the prescribed form to the Registrar of Companies within 7 days of the resolution - a decision made without that filing is not compliant even if the Board approved it informally.
- Digital-record backup location: under the Companies (Accounts) Rules, 2014, where books are maintained in electronic mode, a backup must be kept on servers physically located in India, on a periodic basis - a cloud accounting system hosted entirely on foreign servers with no India-based backup does not meet this requirement even if the primary system is otherwise fully compliant.
Use the Companies Act Related-Party Transaction Approval Checker to work through the related inputs before acting.
Books readiness table
| Area | Control |
|---|---|
| Ledger and vouchers | Invoice/payment evidence mapped to ledger entries. |
| Branch records | Branch summaries reconciled with head-office books. |
| Digital records | Access, backup and audit trail controls. |
| Statutory filings | Books reconcile with GST, TDS, MCA and income-tax data. |
| Inspection readiness | Records indexed by year and location. |
For the connected rule, example or next step, see Key Managerial Personnel Under Section 203: Appointment and Records Checklist.
Monthly discipline
- Lock monthly ledgers after review.
- Keep voucher files and approval evidence.
- Reconcile bank, GST, TDS and payroll monthly.
- Maintain fixed asset and loan schedules.
- Backup accounting data securely.
Finin2min warning
Official sources used
This article is intentionally source-limited to official MCA / India Code material. Verify final filing positions with the latest Act, Rules, MCA forms and portal advisories before publishing.
- India Code: Companies Act, 2013 official PDF
- India Code: Companies (Accounts) Rules, 2014
- India Code: Section 134 — Financial statement, Board's report, etc.
FAQs
Section 128 covers books of account and other relevant books and papers.
Digital records should be maintained in line with the Act/rules and audit-readiness expectations.
Mismatch between books and statutory returns creates audit and notice risk.
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Primary category
- Companies Act & MCA
- Official starting point
- www.mca.gov.in
See “Official sources used” above for the India Code references used in this article.
Primary sources & related provisions
Statutory provisions referenced in this guide: