Income Tax Act 2025: Section 62 for Tax Year 2026-27

Maintenance of books of account

[Section-62 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]

Section 62(1) of Income Tax Act 2025

• 62(1)(a) Any person carrying on specified profession; or
• 62(1)(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); or
• 62(1)(c) any other person carrying on profession notified by the Board in this behalf,

shall keep and maintain such books of account and other documents to enable the Assessing Officer to compute his total income under this Act.

Section 62(2) of Income Tax Act 2025

62(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 one lakh and twenty thousand rupees 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 one lakh and twenty thousand rupees 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, other than the assessee referred to in section 61(2) (Table: Sl. No. 6), 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 two lakh and fifty thousand rupees and its total sales, turnover or gross receipts from such business or profession exceeding two lakh and fifty thousand rupees.

Section 62(3) of Income Tax Act 2025

62(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.

Section 62(4) of Income Tax Act 2025

62(4) In this section, “specified profession” means––

• (a) legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology or company secretary; or
• (b) any other profession, as notified by the Board.

FAQs on Maintenance of Books of Account

1. What is the legal basis for maintenance of books of account under the Income Tax Act, 2025?
Section 62 of the Income Tax Act, 2025 mandates certain persons to maintain books of account and other documents to enable proper computation of income.

2. From which date is Section 62 applicable?
It is applicable w.e.f. 1st April, 2026.

3. Who is required to maintain books of account under Section 62(1)(a)?
Any person carrying on a specified profession must maintain books of account.

4. What professions are classified as “specified professions”?
Specified professions include legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology, and company secretary.

5. Can the list of specified professions be expanded?
Yes, the Board may notify additional professions as “specified professions.”

6. What does Section 62(1)(b) cover?
It covers persons carrying on any business or other profession (not specified under clause (a)) who meet certain income or turnover conditions.

7. What are the conditions under Section 62(2)(a)?
Books must be maintained if, in any of the three preceding years, income exceeds ₹1,20,000 or turnover/gross receipts exceed ₹10,00,000.

8. What are the conditions under Section 62(2)(b) for a newly set-up business or profession?
If income is likely to exceed ₹1,20,000 or turnover/gross receipts likely to exceed ₹10,00,000 in the tax year, books must be maintained.

9. What does Section 62(2)(c) state about claimed income?
If the assessee claims income lower than deemed profits under section 58(2) or 61(2), maintenance of books is mandatory.

10. What are the modified limits under Section 62(2)(d) for individuals and HUFs?
Income and turnover/gross receipts thresholds are increased to ₹2,50,000 each for individuals and HUFs.

11. What is required under Section 62(1)(c)?
Any person carrying on a profession notified by the Board must maintain prescribed books and documents.

12. What authority does the Board have under Section 62(3)?
The Board can prescribe the type of books, particulars to be included, the form, place, manner of maintenance, and retention period.

13. What types of documents may be prescribed under Section 62(3)(a)?
These may include inventories and other relevant documents apart from books of account.

14. For how long should the books of account be retained?
The retention period will be prescribed by the Board under Section 62(3)(d).

15. Does Section 62 override presumptive taxation schemes?
Not necessarily. However, if income is claimed lower than presumptive income under sections 58(2) or 61(2), books must be maintained.

16. Are companies also required to maintain books under Section 62?
Yes, if they meet the income or turnover criteria under the relevant clauses.

17. Is Section 62 applicable to charitable institutions?
Not directly under this section, but separate provisions may apply to such institutions under other sections.

18. What happens if books of account are not maintained as required?
The Assessing Officer may reject the books, and best judgment assessment may be conducted under other provisions.

19. Does digital maintenance of books comply with Section 62?
Yes, provided it is in the form and manner prescribed by the Board.

20. Is an audit mandatory if books are required to be maintained?
Not necessarily. Audit requirements depend on other provisions like Section 64.

21. Who determines if a profession is likely to exceed thresholds in case of new businesses?
The assessee must make a reasonable estimate, subject to verification by the Assessing Officer.

22. Does Section 62 apply to freelancers and consultants?
Yes, if they fall under specified or notified professions or meet the threshold criteria.

23. What are “deemed profits” referred to in Section 62(2)(c)?
They are presumptive incomes under sections like 58(2) and 61(2), where income is calculated on a percentage basis.

24. Are NRIs required to maintain books of account under Section 62?
If they carry on business or profession in India and meet the specified criteria, yes.

25. Can the prescribed manner and format of maintaining books differ based on business type?
Yes, the Board may prescribe different requirements for different classes of businesses or professions.

Section 62 of the Income Tax Act, 2025 lays down a comprehensive framework for the maintenance of books of account by persons engaged in business or profession. It ensures that those with significant income or turnover, or those opting out of presumptive taxation, maintain detailed financial records for accurate income assessment.

The provisions empower the Board to prescribe detailed compliance requirements, reflecting a move toward greater transparency and accountability. With effect from 1st April 2026, taxpayers must carefully assess their obligations under this section to avoid penalties and ensure smooth income tax assessments.