Daily Backup of SaaS based Business Central is Possible?

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Posted on by PG-10080811-0

Our External auditor raised noncompliance to our IT department for not fulfilling daily backup of our Business Central ERP which we are using for our financial transaction. As per Indian Act “With effect from 1 April 2026, Rule 46(8) of the Income-tax Rules, 2026 mandates every taxpayer maintaining books of account in electronic form to take a daily backup of such books, including the cash book, journal, ledger, and other relevant records, and to maintain such backup on a server located in India.”

Non-compliance with this requirement may attract a penalty of Rs. 25,000, apart from other potential adverse consequences under the Income-tax Act.

We are looking for the solution to comply the same

Need suggestion and solution for the concern.

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ParthPatel249 8 on at

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As per my understanding you may follow below steps:
Start by checking your BC environment's Azure region. If it's hosted in Central India or South India, you're likely already covered. If it's outside India, that's your first problem to fix, contact your Microsoft partner.
Talk to your Microsoft CSP/Partner. They've handled this before and can quickly tell you what needs to change, saving you a lot of time.
Get your legal team involved. Microsoft already takes automated daily backups on your behalf. Your lawyer needs to confirm whether a cloud provider's managed backup hosted in India legally satisfies Rule 46(8), this is a legal question, not just a technical one.
Document everything. Whatever the outcome, keep written records of your backup policy, retention period, and restore capability. Your auditor will ask for this.
Get it in writing from Microsoft. Request a formal compliance attestation letter confirming your environment's data residency and backup practices. That letter is your best defence against the Rs. 25,000 penalty.

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