Section 524: presumption as to assets, books of account, etc.

Introduction

Section 524 permits specified presumptions about assets, documents and electronic information found during a search or survey, and extends them to requisitioned material. The statutory word is “may”; the provision identifies possible evidentiary presumptions rather than creating a separate tax charge.

Key takeaways

What may be presumed when items are found during a search or survey

Where books of account, other documents, money, bullion, jewellery, a virtual digital asset or other valuable article or thing, or information in electronic form or on a computer system, is found in the possession or control of a person during a search under section 247 or a survey under section 253, it may, in any proceeding under this Act, be presumed:

• That such books of account, documents, money, bullion, jewellery, virtual digital asset, other valuable article or thing, information or computer system belong or belongs to that person
• That the contents of such books of account and documents, or such information or computer system, are true
• That the signature and every other part of such books of account and documents which purports to be in the handwriting of a particular person, or which may reasonably be assumed to be signed by, or to be in the handwriting of, a particular person, is in that person's handwriting
• For a stamped, executed or attested document, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested
• That an exchange of such information in electronic form, or on such computer system, purported to be exchanged between parties, was in fact exchanged between those parties

Extension to requisitioned material

Where books of account, other documents or assets have been delivered to the requisitioning officer under section 248, the same presumptions apply as if those items had been found in the possession or control of the person referred to in section 248(1)(a), (b) or (c) during a search under section 247.

When this provision applies

Classify the origin of the item: search under Section 247, survey under Section 253, or material delivered through Section 248 as described in subsection (2). Then identify the person’s possession or control and the particular statutory proposition being relied on.

For digital material, separate ownership of the information or system, truth of its contents and the claimed exchange between parties. These are distinct parts of subsection (1), so a clear review identifies which inference is actually relevant.

Limits and procedural safeguards

The statute says the listed facts “may” be presumed. It does not itself levy tax, impose a penalty or conclude that every item associated with a person proves all assertions made about that person.

The requisition extension is tied to delivery under Section 248 and the specified possession or control history. Do not substitute an informal transfer of a document for that statutory route without examining the facts.

Step-by-step review

1. Identify and preserve the item, its source and the search, survey or requisition record.

2. Map the possession or control facts to the person concerned.

3. Identify the precise presumption in clauses (a)–(e) and the proceeding in which it is relied on.

4. Prepare the contemporaneous records, context and explanation relevant to that proposition.

Hypothetical example

Hypothetical illustration: a survey locates a digital message history in a system under a person’s control. Section 524 includes a presumption about an apparent exchange between parties, as well as other specified propositions. The review should identify the actual exchange and context rather than assume that every suggested tax consequence follows automatically.

Records to prepare

Inventory, survey or requisition delivery records and item identifiers.

Original documents or preserved digital records with relevant access and provenance details.

A proposition-by-proposition explanation supported by contemporaneous records.

Official amended Act source

• Income-tax Act, 2025 as amended by Finance Act, 2026: Section 524 and related provisions

Step-by-step flow for applying the presumption in Section 524

1. 1

   How did the item come to light?

   • Found during a search under section 247 or a survey under section 253: Go to the next step.
   • Delivered to the requisitioning officer under section 248: Under Section 524(2), treat it as found in the possession or control of the person from whom it was taken into custody, in a search under section 247. Go to the next step.
   • Neither: The presumption in Section 524 does not arise.
2. 2

   Is it an item listed in Section 524(1)?

   Books of account, other documents, money, bullion, jewellery, virtual digital asset, other valuable article or thing, or information in electronic form (section 261(g)) or on a computer system (section 261(e)), or a computer system containing that information.

3. 3

   Was it in the possession or control of the person?

   The presumption is drawn against the person in whose possession or control the item was found.

4. 4

   Which presumption is relevant?

   Section 524(1): (a) the item belongs to that person; (b) the contents of the books, documents, information or computer system are true; (c) signatures and handwriting are of the person they purport to be of; (d) a stamped, executed or attested document was duly stamped, executed or attested; (e) electronic information shown as exchanged between parties was exchanged between them.

5. 5

   Apply it in the proceeding

   The presumption may be drawn in any proceeding under the Act. The word used is "may", so it is not automatic. Keep records that explain ownership and contents.

Practical checklist

Glossary

Presumption

An evidentiary inference that section 524 permits in the listed circumstances.

Requisition

Taking custody under section 248, for which section 524(2) applies the sub-section (1) presumptions as specified.

Electronic-exchange presumption

The permitted inference under Section 524(1)(e) that the apparent exchange occurred between the parties concerned.

Frequently asked questions