(1) The term “net income” means the gross income as defined hereunder, less allowable business expenses and expenses incurred in the taxpayer’s regular trade or profession.

(2) The net income which may be subjected to tax shall be determined upon the basis of the taxpayer’s annual accounting period, either fiscal or calendar year, and in keeping with the method or manner of accounting regularly employed by the taxpayer in maintaining his or its books of account. Any departure from such books of account shall be made only because of the necessity of omitting certain income excluded from gross income under the provisions of this article, or excluding such deductions which are not provided for herein; provided, however, that in the case of taxpayers subject to regulation by any federal governmental regulatory agency or by a regulatory agency of the State of Mississippi, adjustments will be made from the books of account, if necessary, so as to reflect the taxpayer’s true net income. Estimated deductions shall be subject to the approval of the commissioner.

(3) But, if no such method and manner of accounting has been employed, or if the method or manner employed does not clearly reflect the income, the computation shall be made upon such basis and in such manner as, in the opinion of the commissioner, clearly reflects the income.

(4) If the taxpayer’s annual accounting period is other than a fiscal year as defined in this article, or if he has no annual accounting period, or does not keep books, the net income shall be computed upon the basis of the calendar year.

(5) The taxpayer may elect to file his first return on the basis of receipts and disbursements or the accrual basis, but having exercised this election, he must secure the permission of the commissioner to change such basis.