Chapter IV - Computation of Total Income
Section 62
Section 62: maintenance of books of account
Section 62 is the Income-tax Act, 2025's rule on who must keep books of account for tax purposes. It applies compulsorily to people carrying on a "specified profession," and to other businesses or professions once their income or turnover crosses defined thresholds - this is the successor to what taxpayers used to know as Section 44AA of the old Act.
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This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1)(a) Any person carrying on specified profession; or (b) any person carrying on, business; or any profession [not being a profession referred to in clause (a)] and satisfying the conditions referred to in sub-section (2), shall keep and maintain such books of account and other documents to enable the Assessing Officer to compute his total income under this Act.
(2) The conditions in respect of persons referred to in sub-section (1)(b) shall be the following:— (a) where the income from business or profession exceeds ₹ 120000 or its total sales, turnover or gross receipts from such business or profession exceeds ten lakh rupees in any one of the three years immediately preceding the tax year; or (b) where business or profession is newly set up in the tax year, the income from business or profession is likely to exceed ₹ 120000 or its total sales, turnover or gross receipts from such business or profession is likely to exceed ten lakh rupees during such tax year; or (c) where during the tax year, the assessee referred to in section 58(2) or 61(2) (Table: Sl. Nos. 4 and 5), has claimed income from business or profession to be lower than the deemed profits as referred to in section 58(2) or section 61(2); or (d) in case of an individual or Hindu undivided family, clauses (a) and (b) shall be modified to the extent of income from such business or profession exceeding ₹ 250000 and its total sales, turnover or gross receipts from such business or profession exceeding twenty-five lakh rupees.
(3) For the purposes of this section, the Board may prescribe— (a) the books of account and other documents (including inventories, wherever necessary) to be kept and maintained; (b) particulars to be contained therein; (c) the form, manner and place at which they shall be kept and maintained; and (d) the period for which such books of account and other documents are to be retained.
(4) For the purposes of this section, the expression “specified profession” means— (a) legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology or company secretary; or (b) any other profession, as may be notified by the Board in this behalf.
Introduction
The duty to keep books depends on profession, income and turnover conditions, or a below-presumptive-profit position. Books must be sufficient for the Assessing Officer to compute total income.
Key takeaways
Books of account
A person carrying on business or profession must keep the books and documents required by this section when the relevant income, turnover, receipts or professional-activity condition applies.
Presumptive claims
Certain taxpayers declaring income below a presumptive amount also come under the books requirement; check the applicable statutory threshold and period.
Who must maintain books
Section 62(1) requires books of account to be kept and maintained, sufficient to enable the Assessing Officer to compute total income, by:
- Any person carrying on a specified profession, always; or
- Any person carrying on business, or any other profession, if the conditions in Section 62(2) are met.
The income/turnover thresholds for other businesses and professions
| Category | Threshold |
|---|---|
| General case | Income from business or profession exceeds ₹1,20,000, or sales/turnover/gross receipts exceed ₹10,00,000, in any one of the three tax years immediately preceding the relevant tax year |
| Newly set-up business/profession | Income is likely to exceed ₹1,20,000, or sales/turnover/gross receipts likely to exceed ₹10,00,000, during the tax year in which it is set up |
| Presumptive-scheme assessee claiming lower income | Where an assessee under Section 58(2) or Section 61(2) (Table Sl. Nos. 4 and 5) claims income lower than the deemed profits under those sections |
| Individual or HUF (modified thresholds) | Clauses (a) and (b) use modified thresholds of ₹2,50,000 for business or professional income and ₹25,00,000 for sales, turnover or gross receipts; apply the exact clause to the facts |
What counts as a "specified profession"
Section 62(4) defines "specified profession" as legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology or company secretary practice, or any other profession the Board notifies for this purpose.
Section 62(3) authorises the Board to prescribe the books and documents to be maintained (including inventories where necessary), the particulars they must contain, the form, manner and place of maintenance, and the retention period.
Step-by-step flow for applying Section 62
- 1
Does the person carry on a specified profession?
- Yes: Books must be maintained under Section 62(1)(a), with no threshold.
- No: Go to the next step.
- 2
Is the person an individual or HUF?
- Yes: Thresholds are income above ₹2,50,000 or turnover/gross receipts above ₹25 lakh (Section 62(2)(d)).
- No: Thresholds are income above ₹1,20,000 or turnover/gross receipts above ₹10 lakh.
- 3
Was either threshold crossed in any one of the three preceding tax years (or is it likely to be crossed in the first year of a new business)?
- Yes: Books must be maintained.
- No: Go to the next step.
- 4
Is a presumptive-scheme assessee (Section 58(2) or 61(2) Sl. Nos. 4 and 5) claiming income lower than the deemed profits?
- Yes: Books must be maintained (Section 62(2)(c)).
- No: Section 62(1)(b) does not require books for this year.
Practical checklist
Do
- Test the prior-three-year income and turnover conditions and the current-year rule for a newly set-up activity.
- Preserve transactions, supporting documents and electronic records for the prescribed period.
- Check the special books obligation before reporting profit below a presumptive amount.
Avoid
- Do not assume a small current-year turnover alone removes the books requirement when a prior-year test is met.
Illustrative example
Worked example: a growing proprietorship
Hypothetical facts (illustration only, not a real taxpayer): Ms. Iyer, an individual, runs a boutique. Her turnover was ₹18 lakh, ₹22 lakh and ₹27 lakh in the three preceding tax years. Her business income in each of those years was below ₹2,50,000.
Category
She is an individual carrying on business (not a specified profession), so the Section 62(2)(d) limits of ₹2,50,000 income or ₹25 lakh turnover apply.
Look-back test
Turnover exceeded ₹25 lakh in one of the three preceding years (₹27 lakh).
Result
The condition in Section 62(2)(a), as modified by clause (d), is met.
Outcome
- She must keep the books of account and documents the Board prescribes for this tax year.
- Whether a tax audit is also needed is a separate test under Section 63.
Glossary
- Specified profession
- A profession listed or notified for the Section 62 books requirement.
- Books of account
- Ledgers and supporting records, including permitted electronic forms, enabling computation of income.
Frequently asked questions
Do all professionals have to maintain books of account?
Anyone carrying on a "specified profession" - legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, IT or company secretary practice, or a Board-notified profession - must always maintain books under Section 62(1)(a).
At what income level does an ordinary business have to start maintaining books?
For most assessees, once income from the business/profession exceeds ₹1,20,000 or turnover exceeds ₹10,00,000 in any of the preceding three years (or is likely to in a newly set-up business). For individuals and HUFs, these thresholds are higher - ₹2,50,000 of income or ₹25,00,000 of turnover.
How does Section 62 connect to the presumptive taxation sections?
If an assessee taxed under Section 58(2) or Section 61(2) (Table Sl. Nos. 4 and 5) declares income lower than the deemed presumptive profit, that alone triggers the books-of-account requirement under Section 62(2)(c), regardless of the income/turnover threshold.
Need help applying this provision to your situation?
Get help setting up compliant books of accountLast updated 10 October 2026