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Summary of Section 62 Income Tax Act 2025
Maintenance of Books in Income Tax –
In this case if any limit crosses either sale or Profit , business owners will have to maintain books.
| Business Type | Net Profit | Sales |
|---|---|---|
| Companies, Partnership Firm, LLP, Societies | Above Rs.1.2 Lac | Above Rs.10 Lac |
| Individual Person, Proprietor Ship Firm, HUF | Above Rs.2.5 Lac | Above Rs.25 Lac |
How can small businesses avoid the maintenance of Books of accounts?
The small business owner Individual, Proprietor ship firm and Partnership firm can choose presumptive Taxation scheme where income tax is allowed to show net Income in return at 8% of cash sale and 6% of Bank receipt sale.
In this scheme, eligible small business owners are completely exempt from the tedious requirements of bookkeeping up to an annual revenue limit of Rs. 2 crores. If you are operating beyond these presumptive bounds and want to build clean accounting records for compliance, you can leverage our specialized portal for business tax return filing to align your files securely under our CA panel.
For example
Mr. Ram is doing business of trading or manufacturing, he has annual sale of Rs. 88 lac.
Now he has two options
- Maintain Books of account and show actual Profit in Tax Return
- Choose presumptive scheme where he has to declare 6% or 8% profit on Sales in In Tax Return
Currently ,the Income is not taxable upto Rs.12 lac.
So in this case, his final income under the preemptive scheme will be Rs. at 8% profit Rs.7.04 lac, which will be total Tax Free.
What books of accounts are required to be maintained?
The Business owner are required to maintain following books of accounts-
- Purchase Book
- Sale Book
- Bank Book
- Cash Book
- All Ledgers
- Purchase & Sale bills records
Who Must Maintain Books of Account Under Section 62?
Section 62 applies to two main groups: Business and Specified Professionals. The obligation to maintain books arises by virtue of being engaged in a specified profession, or on satisfaction of income or turnover thresholds as set out in Section 62(2).
1. Specified Professions (Section 62(1)(a) & 62(4))
Any person engaged in a “specified profession” is required to maintain books of account and documents, regardless of income or turnover. Specified professions are: Legal, Medical, Engineering, Architectural, Accountancy, Technical Consultancy, Interior Decoration, Information Technology, Company Secretary, and Any other profession as notified by the Board.
2. Other Businesses and Non-Specified Professions
A. General Thresholds (Firms, Companies, LLPs, etc.)
For persons carrying on business or non-specified professions (other than individuals and HUFs), maintaining books becomes mandatory if, in any one of the three years immediately preceding the relevant tax year:
- Income from business or profession exceeds ₹1,20,000; or
- Total sales, turnover, or gross receipts from business/profession exceed ₹10,00,000.
B. Higher Thresholds for Individuals and HUFs
In the case of individuals or HUFs, the following higher thresholds apply:
- Income from business or profession exceeds ₹2,50,000; or
- Total sales, turnover, or gross receipts from business/profession exceed ₹25,00,000.
Comparison and Improvements Over Previous Law
Section 62 of the Income Tax Act, 2025, introduces revised monetary thresholds and an updated list of specified professions, with clarity on the Board’s powers to specify further record-keeping requirements. Modifications now explicitly address individuals and HUFs, the treatment under presumptive taxation, and the ability for the Board to notify additional professions, all of which may help reduce disputes in practice by setting out objective criteria and statutory definitions.
Threshold Adjustment
The turnover limit for individuals/HUFs was increased from ₹2,50,000 (as originally proposed) to ₹25,00,000 in the final Act, providing relief to smaller taxpayers.
Notification Powers
The provision for the Board to notify additional professions has been incorporated into the definition of “specified profession” under Section 62(4).
Cross-reference Alignment
Updates clarify when book-keeping is required as a result of claimed lower profits under presumptive regimes.
Major Changes from the Income Tax Bill to the Act
Threshold Adjustment
The turnover limit for individuals/HUFs was increased from ₹2,50,000 (as originally proposed) to ₹25,00,000 in the final Act, providing relief to smaller taxpayers.
Notification Powers
The provision for the Board to notify additional professions has been incorporated into the definition of "specified profession" under Section 62(4).
Cross-reference Alignment
Updates clarify when book-keeping is required as a result of claimed lower profits under presumptive regimes.
Who Must Maintain Books of Account Under Section 62?
Section 62 applies to two main groups: Business and Specified Professionals.
The obligation to maintain books arises by virtue of being engaged in a specified profession, or on satisfaction of income or turnover thresholds as set out in Section 62(2).
1. Specified Professions (Section 62(1)(a) & 62(4))
Any person engaged in a "specified profession" is required to maintain books of account and documents, regardless of income or turnover. Specified professions are as listed:
- Legal
- Medical
- Engineering
- Architectural
- Accountancy
- Technical Consultancy
- Interior Decoration
- Information Technology
- Company Secretary
- Any other profession as notified by the Board
2. Other Businesses and Non-Specified Professions (Section 62(1)(b), 62(2))
A. General Thresholds (Firms, Companies, LLPs, etc.)
For persons carrying on business or non-specified professions (other than individuals and HUFs), maintaining books becomes mandatory if, in any one of the three years immediately preceding the relevant tax year:
- Income from business or profession exceeds ₹1,20,000; or
- Total sales, turnover, or gross receipts from business/profession exceed ₹10,00,000.
For businesses or professions newly set up in the relevant tax year, book maintenance is required if income from business or profession is likely to exceed ₹1,20,000 or if total sales/turnover/gross receipts are likely to exceed ₹10,00,000 in that tax year.
A new partnership firm expecting turnover of ₹15,00,000 in its first year must also maintain books.
B. Higher Thresholds for Individuals and HUFs (Section 62(2)(d))
In the case of individuals or HUFs, the following higher thresholds apply:
- Income from business or profession exceeds ₹2,50,000; or
- Total sales, turnover, or gross receipts from business/profession exceed ₹25,00,000.
Mrs. Kaur, a sole proprietor with turnover of ₹30,00,000 and income of ₹2,00,000, is required to maintain books as turnover exceeds ₹25,00,000.
Special Note: Presumptive Taxation (Section 62(2)(c))
Where an assessee, covered under Section 58(2) or 61(2), claims income lower than the deemed profits specified, maintenance of books and documents becomes mandatory, irrespective of general thresholds.
Example: A transporter, ordinarily taxed on a presumptive basis under Section 58(2), declares actual profits less than the deemed amount as per the schedule. The taxpayer is then subject to mandatory book-keeping for rigorous verification of actual income. If your commercial parameters show similar complex drops or your ledgers are unorganized, you can instantly secure an online ca consultation to have our expert corporate lawyers safely structure your declaration entries.
What Must Be Maintained? (Section 62(3))
The Board may prescribe (by notification) the following:
Decision Flowchart: Do You Need to Maintain Books?
Quick Reference Table
| Taxpayer Category | Income Threshold | Sales/Turnover Threshold |
|---|---|---|
| Specified Professions | Not applicable | Not applicable |
| Individuals & HUFs (non-specified) | Above ₹2,50,000 | Above ₹25,00,000 |
| Others (Firms, LLPs, Companies) | Above ₹1,20,000 | Above ₹10,00,000 |
Practical Implications & Compliance Considerations
- Section 62 provides objective monetary and categorical parameters so taxpayers can determine applicability.
- Higher thresholds for individuals and HUFs exclude smaller entities from detailed compliance, unless the statutory limits are surpassed.
- Non-maintenance of required accounting books can directly lead to an unfavorable best judgment assessment by your jurisdictional Assessing Officer, resulting in steep statutory fines under the Act. To eliminate any compliance risks and maintain audit-ready financial statements, it is highly recommended to leave the heavy lifting to our experts and itr file by ca securely.
- Frequent Board notifications or clarifications may specify the nature and particulars of books required or expand the list of specified professions.
Checklist for Section 62 Compliance
Frequently Asked Questions
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