MCA vide Notification No. F. No. 1/19/2013-CL-V-Part III dated April 01, 2021 issued ‘Companies (Accounts) Second Amendment Rules, 2021’ to defer the implementation of mandatory use of accounting software having Audit Trail as provided under proviso to Rule 3 of the Companies (Accounts) Rules, 2014 till March 31, 2022.

Rule 3(1) of the Companies (Accounts) Rules, 2014 now reads as under:

“3. Manner of books of account to be kept in electronic mode.-

(1) The books of account and other relevant books and papers maintained in electronic mode shall remain accessible in India so as to be usable for subsequent reference.

Provided that for the financial year commencing on or after the 1st day of April, 2022, every company which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.”