Sec 4 of information technology act does not enable anyone to stop maintaining physical records. It only refers to maintaining a scanned / digital, untamperable copy of the original physical record as evidence in a court
So, if you want to maintain digital records, you need approval in writing from the concerned authorities (in this case, chief inspector or commissioner)
You can, however, have a software based record and keep monthly print outs for inspection. That practice is generally accepted by labour authorities, though nothing to that effect has been given in writing anywhere