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Section 62 of Income-tax Act 2025 — Who Must Maintain Books of Account

Section 62 of the Income-tax Act, 2025 requires specified professionals to keep books regardless of income, and others once income crosses ₹1,20,000 or turnover ₹10,00,000...

Vikas Sharma Tax & Compliance Expert
6 min read 13 views Updated Sep 12, 2026 Expert Reviewed High Complexity
Section 62 of Income-tax Act 2025 — Who Must Maintain Books of Account
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Last updated: September 2026Applies to: FY 2026-27 (AY 2027-28)Verified against: Government sources
Quick Answer

Section 62 of the Income-tax Act, 2025 requires specified professionals to keep books regardless of income, and others once income crosses ₹1,20,000 or turnover ₹10,00,000 — ₹2,50,000 and ₹25,00,000 for individuals and HUFs.

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What section 62 does

Section 62 is the books-of-account provision, carrying forward section 44AA of the Income-tax Act, 1961. It creates two classes: specified professions, who must maintain books whatever they earn, and everyone else, who must do so once a threshold is crossed.

The specified professions list in sub-section (4) is worth memorising: legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology or company secretary, plus any other profession notified by the Board.

The thresholds are the numbers most readers come for. For a person other than an individual or HUF, books are required where income from business or profession exceeds ₹1,20,000 or turnover exceeds ₹10,00,000. For an individual or HUF those figures are ₹2,50,000 and ₹25,00,000.

When this applies

The Income-tax Act, 2025 takes effect from 1 April 2026 and applies from tax year 2026-27. The Income-tax Act, 1961 continues to govern every year up to 31 March 2026, including assessments, appeals and penalties for those years, because of the repeal and savings provision in section 536. Figures quoted here are the amounts written into the Act as enacted (with the Gazette corrigenda of 3 September 2025); the annual Finance Act can change rates and thresholds.

Old Act and new Act, side by side

The table below shows what the Income-tax Act, 1961 did and where the same ground is covered in the Income-tax Act, 2025.

Income-tax Act, 1961What it didIncome-tax Act, 2025
44AA(1)Specified professions must keep books62(1)(a) with 62(4)
44AA(2)(i) and (ii)Income ₹1,20,000 / turnover ₹10,00,000 thresholds62(2)(a) and (b)
44AA(2), proviso₹2,50,000 / ₹25,00,000 for individuals and HUFs62(2)(d)
44AA(2)(iv)Presumptive income declared lower than deemed profits62(2)(c)
44AA(3)Board may prescribe books, form, place and retention62(3)

Section 62 sub-section by sub-section

Read this alongside the bare text — each heading below is a sub-section of the section as enacted.

Sub-section (1) — who is covered

Two groups must keep and maintain books of account and other documents to enable the Assessing Officer to compute total income: (a) any person carrying on a specified profession, and (b) any person carrying on a business, or a profession that is not a specified profession, who satisfies the conditions in sub-section (2). For group (a) there is no threshold at all.

Sub-section (2)(a) and (b) — the general thresholds

Books are required where income from business or profession exceeds ₹1,20,000, or total sales, turnover or gross receipts exceed ₹10,00,000, in any one of the three years immediately preceding the tax year. For a newly set up business or profession, the test is whether income is likely to exceed ₹1,20,000 or turnover is likely to exceed ₹10,00,000 during that year.

Sub-section (2)(c) — declaring below the presumptive rate

Books are also required where, during the tax year, an assessee referred to in section 58(2) or section 61(2) (Table serial numbers 4 and 5) has claimed income lower than the deemed profits under those sections. Opting out of presumptive taxation therefore brings the books obligation with it — and, under section 63, an audit obligation too.

Sub-section (2)(d) — the higher thresholds for individuals and HUFs

In the case of an individual or Hindu undivided family, clauses (a) and (b) are modified: the income figure becomes ₹2,50,000 and the turnover figure becomes ₹25,00,000. This is the threshold most small proprietors and professionals will actually apply.

Sub-section (3) — what the Board can prescribe

The Board may prescribe the books and documents to be kept, including inventories where necessary; the particulars they must contain; the form, manner and place at which they are kept; and the period of retention. The operative detail therefore lives in the rules, not in the section.

Sub-section (4) — the specified professions

Legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology or company secretary — plus any other profession the Board notifies. Note that information technology and company secretary appear expressly in the statutory list.

Worked example

Four taxpayers in tax year 2026-27.

TaxpayerFactsBooks required under section 62?
An individual practising as an architectGross receipts ₹6,00,000Yes — a specified profession under sub-section (4); no threshold applies
An individual running a trading businessTurnover ₹22,00,000; income ₹2,10,000 in each of the last three yearsNo — both below the individual thresholds of ₹25,00,000 and ₹2,50,000
A partnership firm running the same trading businessTurnover ₹22,00,000Yes — a firm is not an individual or HUF, so the ₹10,00,000 turnover limit applies
An individual with turnover ₹80,00,000 declaring below the section 58 presumptive rateOpting out of presumptive taxationYes — sub-section (2)(c), and audit is also triggered under section 63

The second and third rows show why entity type matters as much as size: identical numbers produce different obligations because the ₹2,50,000 and ₹25,00,000 thresholds in sub-section (2)(d) are available only to an individual or HUF.

Compliance checklist and due dates

  • Determine first whether the activity is a specified profession under sub-section (4) — if so, keep books from rupee one.
  • Apply the individual/HUF thresholds of ₹2,50,000 income or ₹25,00,000 turnover; use ₹1,20,000 and ₹10,00,000 for all other persons.
  • Test the thresholds against any one of the three immediately preceding years, not just the current year.
  • For a newly set up business, apply the 'likely to exceed' test for the year itself.
  • If you declare income below the section 58 or section 61(2) presumptive rate, expect both the books requirement in section 62 and the audit requirement in section 63.
  • Follow the prescribed form, place and retention period made under sub-section (3).

Common mistakes

  • Applying the ₹2,50,000 / ₹25,00,000 thresholds to a firm, company or LLP. Sub-section (2)(d) is limited to individuals and HUFs.
  • Testing only the current year. The condition looks at any one of the three preceding years.
  • Assuming a small professional practice is exempt. A specified profession has no threshold.
  • Overlooking that opting out of presumptive taxation independently triggers the books requirement.
  • Discarding records early — the retention period is prescribed under sub-section (3).
Please note

This is an explanatory guide, not tax advice, and it does not reproduce the section in full. Read the bare text of the section before you rely on it, and check for later amendments, the Income-tax Rules made under the new Act, and CBDT circulars and notifications.

Related Guides

Key Facts About Section 62 of Income

  • Applies in: All states across India, under the relevant central law.
  • Mode: Mostly online via the official government portal.
  • Typical timeline: Ranges from a few days to a few weeks depending on the case.
  • Non-compliance: May attract penalties, interest or late fees.
  • Expert help: TaxClue completes the entire process end to end for you.

Which section replaces section 44AA of the Income-tax Act, 1961?

Section 62 of the Income-tax Act, 2025 — maintenance of books of account.

What are the books of account thresholds?

Income above ₹1,20,000 or turnover above ₹10,00,000 in any one of the three preceding years. For an individual or HUF, section 62(2)(d) raises these to ₹2,50,000 and ₹25,00,000.

Over 90% of compliance penalties in India arise from missed due dates — timely handling can save businesses thousands of rupees each year.

— TaxClue Compliance Desk

Section 62 of Income: a key compliance topic in Indian tax and corporate law that businesses and individuals must understand to remain compliant.

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Frequently Asked Questions
Which section replaces section 44AA of the Income-tax Act, 1961?
Section 62 of the Income-tax Act, 2025 — maintenance of books of account.
What are the books of account thresholds?
Income above ₹1,20,000 or turnover above ₹10,00,000 in any one of the three preceding years. For an individual or HUF, section 62(2)(d) raises these to ₹2,50,000 and ₹25,00,000.
Which are the specified professions?
Legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology and company secretary, plus any other profession notified by the Board — section 62(4).
Do specified professionals have a threshold?
No. Section 62(1)(a) requires them to maintain books irrespective of income or turnover.
Does declaring lower than presumptive income require books?
Yes. Section 62(2)(c) applies where an assessee covered by section 58(2) or section 61(2) claims income lower than the deemed profits.
How long must books be retained?
The retention period is prescribed by the Board under section 62(3).
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Disclaimer: This article is for general informational purposes only and does not constitute professional tax, legal or financial advice. Laws, rates and due dates change and can vary by individual case — always verify with the relevant government source (e.g. mca.gov.in, incometax.gov.in) or consult a qualified professional before acting. TaxClue accepts no liability for decisions taken based on this content.

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