A summary of section 128 of the Companies Act, 2013 and Rule 3 of the Companies (Accounts) Rules, 2014, as at the date shown. Read the text of the law for the full requirement.
At a glance
| What | Books of account, other relevant books and papers, and the financial statements, for every financial year, giving a true and fair view and explaining transactions at the registered office and branches |
|---|---|
| Basis | Accrual basis and double-entry system |
| Where | At the registered office; or another place in India decided by the Board, with notice to the Registrar within seven days |
| How long | Not less than eight financial years immediately preceding the current year, with the vouchers for entries in them; all years if the company is younger than eight years |
| Electronic books | Allowed, subject to Rule 3 |
| Failure | Penalties on the company and the officers responsible, as provided in section 128 |
Electronic records: Rule 3
- Books remain accessible in India at all times
- Records are retained complete and unaltered, in the original format or one that shows the information accurately
- There is a system for storage, retrieval, display, and printout
- A backup is kept daily on servers physically located in India, including for books kept outside India
- Where the service provider is outside India, the name and address of the person in India in control of the books are given to the Registrar
Audit trail
- Accounting software records an audit trail of each transaction
- An edit log shows each change and the date it was made
- The audit-trail feature cannot be disabled
- The trail is preserved for the same period as the books
- The statutory auditor reports on compliance
Checks to make each year
- Ledgers and vouchers for the eight preceding years can be produced
- The place where books are kept is the registered office or has a Board resolution and Registrar notice
- The hosting location, the controller of the books, and the backup location are recorded
- Evidence that the audit-trail feature is on has been saved
Source: Companies Act, 2013, section 128, and Companies (Accounts) Rules, 2014, rule 3. Reviewed on 3 October 2026.