Section 62 of the Income-tax Act, 2025 requires every person carrying on a specified profession to maintain books of account. Others must do so where income exceeds ₹1,20,000 or turnover exceeds ₹10,00,000; for individuals and HUFs the thresholds are ₹2,50,000 and ₹25,00,000.
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.
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, 1961 | What it did | Income-tax Act, 2025 |
|---|---|---|
| 44AA(1) | Specified professions must keep books | 62(1)(a) with 62(4) |
| 44AA(2)(i) and (ii) | Income ₹1,20,000 / turnover ₹10,00,000 thresholds | 62(2)(a) and (b) |
| 44AA(2), proviso | ₹2,50,000 / ₹25,00,000 for individuals and HUFs | 62(2)(d) |
| 44AA(2)(iv) | Presumptive income declared lower than deemed profits | 62(2)(c) |
| 44AA(3) | Board may prescribe books, form, place and retention | 62(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.
| Taxpayer | Facts | Books required under section 62? |
|---|---|---|
| An individual practising as an architect | Gross receipts ₹6,00,000 | Yes — a specified profession under sub-section (4); no threshold applies |
| An individual running a trading business | Turnover ₹22,00,000; income ₹2,10,000 in each of the last three years | No — both below the individual thresholds of ₹25,00,000 and ₹2,50,000 |
| A partnership firm running the same trading business | Turnover ₹22,00,000 | Yes — 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 rate | Opting out of presumptive taxation | Yes — 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).
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.