Maintenance of Books of Accounts Under Income Tax Act, 2025

Last updated: 29 August 2026

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The Income Tax Act, 2025, under Section 62, mandates that certain businesses and professionals must maintain books of accounts if their income or turnover exceeds specific limits. The requirements vary based on the type of profession or business, with specified professions often needing to keep records regardless of income, unless a presumptive scheme is used. For non-specified professions and businesses, thresholds are based on income or gross receipts.

Maintaining proper books of accounts is an important part of tax compliance for businesses and professionals. UnderSection 62 of the Income-tax Act, 2025, certain taxpayers are required to prepare and maintain books of account when their income, gross turnover or receipts cross the prescribed limits. The rules differ depending on whether the taxpayer is engaged in a specified profession, a non-specified profession, a business covered by the presumptive taxation scheme, or another business. W

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FAQ :

Certain businesses and professionals are required to maintain books of accounts if their income, gross turnover, or receipts cross prescribed limits, as defined by Section 62 of the Act.

Specified professionals generally must maintain books of accounts, except when they opt for an applicable presumptive taxation scheme.

For individuals or HUFs, books are required if professional income exceeds Rs 2.50 lakh or gross receipts exceed Rs 25 lakh in any of the three preceding years. For other taxpayers, the limits are Rs 1.20 lakh income or Rs 10 lakh gross receipts.

For specified professions (excluding company secretaries and IT), records include a cash book, journal (if using the mercantile system), ledgers, copies of bills/receipts over Rs 250, original bills/receipts for expenditure over Rs 250, and signed payment vouchers for expenditure of Rs 250 or less if not detailed in the cash book.

Taxpayers must retain books of account and related documents for seven years from the end of the relevant tax year. This period can be extended if an assessment is reopened.

Failure to maintain or retain books of account and other documents for the prescribed period can result in a penalty of Rs 25,000 under Section 441.

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Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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