Documentation is at the heart of accounting. However, a question arises as to the period in which the tax records need to be maintained.
How long to keep Bookkeeping Documents :
There is a requirement that you need to keep your tax records for five years from the date you file your tax returns preparation.
However, there are some instances in which you are required to keep the tax records for an enhanced period. For example, in case you are availing depreciation on assets, you need to keep records for more than 5 years. You need to keep proof of an asset’s purchase for more than 5 years.
The medium of Storage: You can keep the records in electronic form as well. However, the same should be easily accessible and should be in the English Language.
You need to have a sound record-keeping system in place to avoid any trouble in the future. The absence of record-keeping can lead to hefty penalties as a dis-allowance of tax deductions.