Home / Income Tax / Maintenance of Books of Account

Section 44AA Now Section 62: Maintenance of Books of Account

Section 44AA of the Income-tax Act, 1961 dealt with maintenance of books of account by persons carrying on specified professions, other professions and businesses. From 1 April 2026, the Income-tax Act, 2025 is in force and the corresponding current provision is Section 62, titled "Maintenance of books of account".

Current law from 1 April 2026: References to Section 44AA on older records, returns, assessments and tax material relate to the Income-tax Act, 1961. For the current tax law, Section 62 of the Income-tax Act, 2025 and Rule 46 of the Income-tax Rules, 2026 should be read together.

What does Section 62 require?

Section 62 requires prescribed persons carrying on a business or profession to keep and maintain books of account and other documents sufficient to enable the Assessing Officer to compute total income under the Income-tax Act, 2025.

Specified professions Legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology and company secretary professions are expressly covered, along with any other profession notified by the Board.
Other business or profession Books are required when the income, sales, turnover or gross-receipt conditions in Section 62(2) are met, including specified cases involving income claimed below deemed profits.

Income and turnover limits under Section 62

Category Income condition Sales, turnover or gross receipts condition
Person carrying on business or non-specified profession Exceeds Rs. 1,20,000 Exceeds Rs. 10,00,000
Individual or Hindu undivided family Exceeds Rs. 2,50,000 Exceeds Rs. 25,00,000

For an existing business or profession, the relevant test applies if the prescribed limit is exceeded in any one of the three tax years immediately preceding the tax year. For a newly set-up business or profession, the test is based on whether the income or receipts are likely to exceed the applicable limit during that tax year.

Section 62 also covers specified situations where an assessee claims income lower than the deemed profits under the provisions referred to in Section 62(2)(c). The presumptive taxation provisions should therefore be checked separately where applicable.

Specified profession: meaning under Section 62

For Section 62, "specified profession" includes the following professions:

  • Legal profession
  • Medical profession
  • Engineering profession
  • Architectural profession
  • Accountancy
  • Technical consultancy
  • Interior decoration
  • Information technology
  • Company secretary
  • Any other profession notified by the Central Board of Direct Taxes

Books and documents prescribed by Rule 46

Rule 46 of the Income-tax Rules, 2026 prescribes the record-keeping framework under Section 62. For the professions specifically covered by Rule 46(2), the prescribed records include:

  • cash book;
  • journal where accounts are maintained under the mercantile system;
  • ledger;
  • copies of bills or receipts issued for sums of Rs. 250 or more;
  • original bills and receipts for expenditure of Rs. 250 or more; and
  • payment vouchers for expenditure not exceeding Rs. 250 where the cash book does not contain adequate particulars.
Rule 46 professional-receipts relief: The specific prescribed-books requirement in Rule 46(2) does not apply for a tax year where total gross receipts of the profession do not exceed Rs. 1,50,000 in any one of the three immediately preceding tax years. For a newly set-up profession, the corresponding test is whether gross receipts for that tax year are likely to exceed Rs. 1,50,000.

Additional records for medical professionals

A person carrying on a medical profession who is covered by Rule 46 must additionally maintain a daily case register in Form No. 25 and an inventory, under broad heads, of drugs, medicines and other consumable accessories as on the first and last day of the tax year.

Electronic books and daily backup in India

Rule 46 specifically addresses electronic records. Books of account and other documents maintained electronically under the relevant sub-rules must remain accessible in India at all times. Their backup must be maintained on a daily basis on servers physically located in India.

How long must books of account be retained?

Under Rule 46, the specified books of account and documents must generally be retained for seven tax years from the end of the relevant tax year. Where an assessment has been reopened, the records existing at the time of reopening must continue to be retained until the reopened assessment is completed.

Where should the books be kept?

For the professions governed by the place-of-maintenance rule, current-year books are ordinarily kept at the place where the profession is carried on. If the profession is carried on at more than one place, they may be kept at the principal place of profession, or separate books may be maintained at the respective places.

Section 44AA under the Income-tax Act, 1961

Before 1 April 2026, Section 44AA of the Income-tax Act, 1961 governed maintenance of accounts by certain persons carrying on business or profession. It required specified professionals to maintain records enabling computation of total income and imposed record-keeping obligations on other businesses and professions when the statutory conditions were satisfied.

The former Section 44AA also contained the Rs. 1,20,000 income and Rs. 10 lakh sales, turnover or gross-receipts limits, with Rs. 2,50,000 and Rs. 25 lakh limits for individuals and HUFs. The Income-tax Act, 2025 reorganised this subject into Section 62.

Section 62 and tax audit are different requirements

Maintenance of books and tax audit are related but separate compliance requirements. Section 62 deals with maintenance of books of account, while Section 63 of the Income-tax Act, 2025 contains the current tax-audit provision. A person should therefore examine the audit requirement separately even after determining the obligation to maintain books.

Practical compliance checklist

  1. Identify whether the activity is a specified profession, another profession or a business.
  2. Check the applicable income and turnover or gross-receipts tests for the relevant tax year.
  3. Check whether Rule 46 prescribes particular books and documents for the profession.
  4. Maintain supporting bills, receipts, vouchers, ledgers and other records necessary to compute taxable income.
  5. For electronic books covered by Rule 46, ensure continuous accessibility in India and daily backup on servers physically located in India.
  6. Preserve the prescribed records for the required retention period and longer where a reopened assessment requires continued preservation.
  7. Separately examine whether tax audit under Section 63 applies.

Official references

For the latest statutory text and rules, refer to the official Income Tax Department resources:

Updated: 28 September 2026. This article is intended as a general legal and tax reference. Applicability can depend on the taxpayer's facts, tax year, nature of activity and other provisions of the Income-tax Act, 2025.