Six to eight years of books, on demand
Every Indian business has to keep its accounts and records for years after the year they belong to, and produce them when an officer asks. Today most of those records are electronic: an accounting company file, a billing database, PDFs of invoices and e-way bills. The law is clear that keeping them electronically is fine. Keeping them readable for six to eight years is the part businesses get wrong.
This is a general guide, not legal advice. Your chartered accountant can tell you what applies to your business.
GST: 72 months from the annual return due date
Under section 36 of the CGST Act, a registered person must keep the books of account and records required by section 35 until 72 months from the due date of the annual return for that year.
- The annual return for a financial year is normally due on 31 December after the year ends.
- So the records for FY 2025-26 (annual return due 31 December 2026) must be kept until 31 December 2032.
- If the business is party to an appeal, revision or other proceedings, or under investigation, the related records must be kept for one year after the matter is finally disposed of, if that is later than the 72 months.
GST law accepts electronic records. The CGST Rules also expect a business that keeps records electronically to keep a proper backup, so that records lost to an accident or a natural cause can be restored within a reasonable time. A single copy on the office PC does not meet that.
Companies Act: eight financial years
Section 128(5) of the Companies Act, 2013 requires a company to keep its books of account, with the relevant vouchers, for at least eight financial years before the current year. A company younger than eight years keeps everything since it started.
- In FY 2026-27, a company must still hold its books back to FY 2018-19.
- The government can order a longer period, for example where an investigation has been ordered.
Income tax: six years, and longer if a year is reopened
Under Rule 6F(5) of the Income-tax Rules, 1962, professionals covered by that rule must keep their books and documents for six years from the end of the relevant assessment year. For FY 2025-26 (assessment year 2026-27) that runs to 31 March 2033. If an assessment is reopened within the time allowed, the records must be kept until the reopened assessment is complete.
Other businesses are commonly advised to keep their books at least as long, since a past year can be reopened. The Income-tax Act, 2025 replaces the 1961 Act from 1 April 2026, and its rules may change these periods, so check the current position with your CA.
A simple rule of thumb
Taking the longest of the three, many businesses settle on this: keep every year's books and records for at least eight years after the year ends, and longer for any year with an open case. Whatever you choose, write it down, so staff know what may be deleted and when.
The real risk: records you have but cannot open
The laws above ask you to produce records, not just to have once had them. With electronic records, years of work can fail for reasons that have nothing to do with the law:
- The disk fails and the only copy was on it.
- Ransomware locks the accounts folder, and the backup drive plugged into the same PC.
- The software changes. A company file from eight years ago may need an old version of the program to open it. Note which version each year was closed in.
- Nobody tested the backup. The copy was there, but it would not open.
How to keep electronic records safe for eight years
- Back up every day, automatically, with earlier copies kept, not only last night's.
- Keep a copy away from the office, where one fire, theft or virus cannot reach it.
- Take a year-end copy after the books for a year are closed and the annual return is filed, and keep it apart from the daily backups, on at least two separate media.
- Test a restore at least once a year: bring the copy back into a separate folder and open it.
- Keep the PDFs too: invoices, e-way bills, GST returns and challans you downloaded, not only the accounting file.
How JS1 Vault helps
JS1 Vault takes care of the daily part. Every evening it backs up your accounting data, databases, folders and files, checks every copy, keeps them in India where they cannot be changed or deleted from your PC, and emails you that they are safe. Database copies are kept daily for a week, weekly for four weeks and monthly for a year, and once a month a database copy is restored on your PC to prove it really comes back.
For the year-end copies you keep for eight years, keep your own closing copies as described above, alongside the vault.
Read more: how to back up Tally data automatically and SQL Server Express automatic backup without SQL Agent.
See how JS1 Vault works and start a free trial.
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