The Ministry of Corporate Affairs (MCA) has amended the Companies (Accounts) Fourth Amendment Rules, 2022.
These amendments came into effect on August 11, 2022.
• One of the key changes under the amended rules is that companies are now required to maintain a daily backup of their books of accounts and other relevant books and papers in an electronic mode on servers physically located in India.
• Previously, companies were only required to maintain a periodic backup of their books of accounts.
• The rationale behind the change is to ensure that the books of accounts are always accessible to the authorities in India, even if the company’s servers are located outside the country.
• This is important for the purpose of carrying out audits and investigations by the authorities.
Here are some of the key things to keep in mind about the new rules:
• The backup must be stored on servers physically located in India.
• The backup must be taken on a daily basis.
• The backup must be in an electronic format.
• The company must be able to provide access to the backup to the authorities upon request.
Companies that fail to comply with the new rules may be subject to penalties, such as fines or imprisonment.
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