Section 62 Maintenance of books of account.

Income-tax Act, 2025

At a Glance

Clause 62 of the Income Tax Bill, 2025 (Old Version) prescribes the requirement to keep and maintain books of account for persons carrying on specified professions, businesses, and certain notified professionals, with thresholds and conditions for record-keeping. It matters for taxpayers (individuals, HUFs, professionals and businesses) and the revenue department as it defines who must maintain books and what the Board may prescribe. Effective date or decision date: Not stated in the document.

Background & Scope

Statutory hooks: Clause 62 of the Income Tax Bill, 2025 (Old Version) is placed under the heading "Profits and gains of business or profession" and addresses maintenance of books of account. The clause sets out who shall keep books (sub-section (1)), the conditions under which persons carrying on business or professions must maintain books (sub-section (2)), the Board's power to prescribe particulars and retention periods (sub-section (3)), and the definition of "specified profession" (sub-section (4)). Definitions: "specified profession" is defined by example (legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology or company secretary) and by residual Board notification. The clause provides thresholds by quantum of income and by turnover for triggering the requirement.

Statutory Provision Mode

Text & Scope

Coverage: Clause 62(1) requires that any person carrying on a specified profession; any person carrying on business; any person carrying on a profession (not being one listed in clause (a)) and satisfying conditions in subsection (2); or any other person carrying on profession notified by the Board, shall keep and maintain books of account and other documents to enable the Assessing Officer to compute total income under the Act.

Ingredients / elements: The obligation is triggered either by categorical status (specified profession; notified profession) or by satisfying conditions in subsection (2) for persons conducting business or non-specified professions. Sub-section (2) sets out four alternative tests (a)-(d) each of which, if met, requires maintenance of books.

Interpretation

Legislative intent and interpretive principles indicated by the text: The clause aims to place an objective record-keeping burden on classes of assessees to facilitate assessment. Thresholds (income and turnover) function as objective bright-line tests. The Board's delegated power in sub-section (3) signals intent to allow administrative specification of form, content and retention. The inclusion of a residual notification power both in sub-section (1)(c) and in the definition of specified professions indicates an intent to retain flexibility to capture additional professions by administrative action.

Exceptions/Provisos

Carve-outs and modifications: Clause 62(2)(c) excludes certain assessees (specifically, "the assessee, other than the assessee referred to in section 61(2) (Table: Sl. No. 6)") from the requirement when they claim income lower than deemed profits - effectively a condition that triggers record-keeping where claimed profits are lower than deemed profits. Clause 62(2)(d) modifies threshold amounts for individuals and Hindu undivided families lowering or changing the monetary triggers. No other provisos or exemptions are provided in the clause. Specifics regarding the referenced sections and table entries are Not stated in the document.

Illustrations

• Example 1: A chartered accountant in private practice (a specified profession) must keep and maintain books of account regardless of income/turnover thresholds because clause (1)(a) covers specified professions.

• Example 2: A small trader whose total turnover exceeded Rs. 10 lakh in any of the three preceding years must maintain books under clause (2)(a).

• Example 3: An individual running a small business with income of Rs. 2.2 lakh and turnover of Rs. 3 lakh - whether books must be maintained depends on clause (2)(d): the Bill sets thresholds for individuals at income exceeding Rs. 2.5 lakh and turnover exceeding Rs. 2.5 lakh; thus in this scenario, record-keeping would not be triggered. (Numeric thresholds are as stated in the Bill.)

Interplay

Interaction with Rules/Notifications/Circulars: Clause 62(3) expressly delegates to the Board the power to prescribe the books, particulars, form, manner, place of maintenance and retention periods. Clause 62(1)(c) and sub-section (4)(b) permit the Board to notify additional professions. No specific rules or notifications are reproduced in the document. Therefore, operational detail (forms, formats, timelines) is Not stated in the document.

Differences Between Clause 62 of the Income Tax Bill, 2025 (Old Version) and Section 62 of the Income-tax Act, 2025

• Scope - inclusion of other notified persons: The Bill (Old Version) Clause 62(1)(c) expressly includes "any other person carrying on profession notified by the Board in this behalf." The Section 62 (final/updated) omits this separate sub-clause (c) but retains in sub-section (4)(b) that the Board may notify "any other profession."
  • Practical impact: The Bill's explicit sub-clause (1)(c) created an express standalone category of persons required to maintain books by Board notification; the later Section collapses such notification power into the definition of "specified profession." This narrows the textual placement of Board's notification power but substantively preserves the Board's ability to notify additional professions. Administrative clarity may be affected (different location for the Board's power), but substantive coverage appears similar.
• Threshold figures - numeric expression and apparent error: Clause 62(2)(d) in the Bill (Old Version) states that for individuals/HUFs, clauses (a) and (b) shall be modified to the extent of income exceeding "two lakh and fifty thousand rupees" and turnover exceeding "two lakh and fifty thousand rupees." Section 62(2)(d) (updated) sets the modified thresholds at income exceeding "Rs. 250000" and turnover exceeding "twenty-five lakh rupees."
  • Practical impact: The Bill's turnover threshold for individuals/HUFs appears to contain a likely drafting error (turnover same as income figure - Rs. 250,000) whereas the updated Section clarifies that the turnover threshold is Rs. 25 lakh. This is a substantive correction: in the Bill an individual/HUF threshold for turnover would have been unrealistically low (and inconsistent with earlier clause (a) turnover threshold of Rs. 10 lakh), whereas the updated Section aligns turnover threshold with a higher limit (25 lakh), materially loosening record-keeping obligations for small individual/HUF businesses that have turnover between Rs. 2.5 lakh and Rs. 25 lakh.
• Cross-reference differences in clause (2)(c): The Bill's clause (2)(c) disqualifies only "the assessee, other than the assessee referred to in section 61(2) (Table: Sl. No. 6)," from claiming profits lower than deemed profits; the updated Section 62(2)(c) refers to "the assessee referred to in section 58(2) or 61(2) (Table: Sl. Nos. 4 and 5)."
  • Practical impact: The updated Section changes which cross-referenced assessees are caught by this provision (different table/serial numbers) - this may broaden or narrow the category, depending on the contents of those referenced rows. The Bill attempt to carve out a specific exception; the updated text rearranges the references. Exact practical effect requires consulting the referenced tables (Not stated in the document).

Practical Implications

• Compliance and risk areas: Taxpayers falling under the enumerated categories (specified professions, notified professions, businesses meeting income/turnover thresholds) must ensure maintenance of books sufficient for computation of total income. Failure to maintain adequate books may expose taxpayers to adverse assessments or penalties; however, specific penalties are Not stated in the document.
• Record-keeping/evidence points: The Board may prescribe the exact books and particulars; until such prescriptions are issued, the minimum necessary is to retain contemporaneous records evidencing income, receipts, expenses and inventories as may be applicable. Retention periods are to be specified by the Board; current retention expectations are Not stated in the document.

Key Takeaways

• Clause 62 requires maintenance of books of account by specified professions, businesses and notified professions to enable computation of total income.
• Objective thresholds trigger the obligation for persons not in specified professions: income in excess of Rs. 120,000 or turnover in excess of Rs. 10 lakh in any of the three preceding years; similar thresholds apply for newly set up businesses expected to exceed those figures.
• Individuals and HUFs have modified thresholds in clause (2)(d): income exceeding Rs. 250,000 and turnover exceeding Rs. 250,000 (as stated in the Bill), which materially differs from the turnover figure in the later Section (Noted difference above).
• The Board is empowered to prescribe the specific books, particulars, form, manner, place and retention period; operational details depend on ensuing rules/notifications.
• Residual administrative flexibility exists via Board notifications to include additional professions within the record-keeping requirement.
• Cross-references to other sections (58/61 or 61(2) Table entries) affect application where deemed profits are prescribed - exact impact requires consulting those provisions (Not stated in the document).

Full Text:

Section 62 Maintenance of books of account.