Section 62 — Maintenance of books of account. Successor to s.44AA of the 1961 Act.
Section 62 is in Chapter IV — Computation of Total Income, which runs from section 13 to section 95.
Sub-section (1) imposes the obligation to keep and maintain such books of account and other documents as will enable the Assessing Officer to compute total income under the Act. It binds two groups: clause (a), any person carrying on a specified profession, without any threshold at all; and clause (b), any person carrying on business, or any profession that is not a specified profession, who satisfies a condition in sub-section (2).
Sub-section (2) sets those conditions. Clause (a) is the existing-business test: income from business or profession exceeding Rs. 120000, or total sales, turnover or gross receipts from it exceeding ten lakh rupees, in any one of the three years immediately preceding the tax year. Clause (b) is the new-business test: where the business or profession is newly set up in the tax year, the same figures applied to what is likely during that year. Clause (c) brings in an assessee referred to in section 58(2) or 61(2) (Table: Sl. Nos. 4 and 5) who has claimed income from business or profession lower than the deemed profits under those provisions. Clause (d) modifies clauses (a) and (b) for an individual or Hindu undivided family, substituting income exceeding Rs. 250000 and total sales, turnover or gross receipts exceeding twenty-five lakh rupees.
Sub-section (3) empowers the Board to prescribe the books and documents (including inventories where necessary), the particulars they must contain, the form, manner and place of keeping them, and the period of retention. Sub-section (4) defines "specified profession" as legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology or company secretary, or any other profession notified by the Board.
An assessment of business income is only as good as the records behind it, so the Act requires records adequate for the Assessing Officer to compute total income rather than merely records the assessee finds convenient. The specified professions are put under an unconditional duty because their income is not readily verifiable from third-party trails, while everyone else is brought in only above a size threshold so that very small operations are not burdened. Clause (2)(c) closes the obvious gap: a person who opts out of the presumptive figure by declaring less must have books to prove it.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Income threshold for an existing business or non-specified profession | Rs. 120000 | Income from the business or profession exceeding this amount in any one of the three years immediately preceding the tax year; replaced by Rs. 250000 for an individual or Hindu undivided family | Sub-section (2)(a), as modified by (2)(d) |
| Turnover threshold for an existing business or non-specified profession | Ten lakh rupees | Total sales, turnover or gross receipts exceeding this amount in any one of the three years immediately preceding the tax year; replaced by twenty-five lakh rupees for an individual or Hindu undivided family | Sub-section (2)(a), as modified by (2)(d) |
| Income threshold for a newly set up business or profession | Rs. 120000 | Income likely to exceed this amount during the tax year in which the business or profession is newly set up; replaced by Rs. 250000 for an individual or Hindu undivided family | Sub-section (2)(b), as modified by (2)(d) |
| Turnover threshold for a newly set up business or profession | Ten lakh rupees | Total sales, turnover or gross receipts likely to exceed this amount during the tax year in which the business or profession is newly set up; replaced by twenty-five lakh rupees for an individual or Hindu undivided family | Sub-section (2)(b), as modified by (2)(d) |
| Modified income threshold for an individual or Hindu undivided family | Rs. 250000 | Substituted for Rs. 120000 in clauses (a) and (b) where the assessee is an individual or Hindu undivided family | Sub-section (2)(d) |
| Modified turnover threshold for an individual or Hindu undivided family | Twenty-five lakh rupees | Substituted for ten lakh rupees in clauses (a) and (b) where the assessee is an individual or Hindu undivided family | Sub-section (2)(d) |
| Look-back period for the existing-business test | Any one of the three years immediately preceding the tax year | Crossing the threshold in any one of those three years is enough; it need not be crossed in all three | Sub-section (2)(a) |
A specified profession has no escape route through size: clause (1)(a) binds it regardless of receipts, and the thresholds in sub-section (2) are only for businesses and for professions outside the sub-section (4) list. For those, the income test and the turnover test are alternatives joined by "or" and the look-back is "any one of the three years immediately preceding" — one qualifying year out of three is enough, so a business that has shrunk can still be under the duty. The higher figures in clause (2)(d) apply only to an individual or Hindu undivided family; a firm, company or other person stays on Rs. 120000 and ten lakh rupees. Clause (2)(c) works independently of size: declaring less than the deemed profits under section 58(2) or 61(2) (Table: Sl. Nos. 4 and 5) brings the books requirement in on its own. What the books must be, and for how long they must be kept, is not in the section — sub-section (3) leaves all of that to be prescribed.
A firm carrying on a trading business has turnover of twelve lakh rupees two years before the tax year and eight lakh rupees in each of the other two preceding years. Clause (2)(a) is satisfied, because the ten lakh rupee turnover figure was exceeded in any one of the three immediately preceding years, so the firm must keep books for the tax year. Had the same business been carried on by an individual, the applicable turnover figure would be twenty-five lakh rupees under clause (2)(d) and none of the three years would cross it. A practising architect is in a different position again: architectural practice is a specified profession under sub-section (4)(a), so clause (1)(a) applies whatever the receipts.
This is the section behind the books an assessee is asked to produce when a business return is taken up for scrutiny and the Assessing Officer calls for accounts, and behind the tax audit particulars an accountant reports on maintenance of records. A person who has declared below the presumptive figure meets it as the reason the Department expects full books rather than a summary statement.
shall keep and maintain such books of account and other documents to enable the Assessing Officer to compute his total income under this Act
where the income from business or profession exceeds Rs. 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
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 Rs. 250000 and its total sales, turnover or gross receipts from such business or profession exceeding twenty-five lakh rupees.
See the full 1961 to 2025 concordance.
All of them are in the Rules 2026 index.
See every circular and notification on this section, or the circulars index.
See every circular and notification on this section, or the notifications index.
