Applicability of Books of Account for Commission Income (Sections 194D & 194H)

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RAJANEESH V R (Querist)
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26 July 2026 Sir,
An assessee earning income in the nature of commission (on which tax is deducted under section 194D or section 194H) is generally required to maintain books of account and file the Income-tax Return accordingly.
However, in practice, returns are also being filed without preparing books of account in certain cases, particularly where the assessee also has income from salary, bank interest (including fixed deposit interest), or other non-business sources.

Kindly clarify:
Is there any provision under the Income-tax Act, 1961, or the Income-tax Rules that permits filing the return without maintaining books of account where the assessee has commission income along with salary and interest income?
Is there any monetary threshold of commission income up to which books of account are not required to be maintained?
If yes, kindly specify the relevant section, rule, CBDT circular, or notification governing the same.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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26 July 2026 An assessee earning commission income (under Sections 194D or 194H) alongside salary and interest is not required to maintain books of account if gross commission receipts do not exceed ₹25 Lakhs and net income from business does not exceed ₹2,50,000 under Section 44AA(2). Although presumptive taxation under Section 44AD is explicitly prohibited for commission agents, taxpayers staying below the Section 44AA threshold can file ITR-3 by reporting gross receipts and estimating expenses under the "No Books of Account" provisions.

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