To include only selected categories of professionals u/s 44AA(1) of the Income Tax 1961 [Section 62(1) of the Income Tax Act 2025]

In today’s world majority of the proprietors and start-ups have in-house or external professionals. be developing a software to organizing a wedding, from designing your garden to virtual CFOs who may be from backgrounds other than accounting.

Section 62(4) of the Income-tax Act, 2025 includes the categories of professionals and allows these professionals to offer minimum 50% of their gross receipts from their professional services under the head “Income from Business & Profession” without maintaining the books of accounts.

Primarily, the Income-tax rules require a professional whose billing exceeds INR 1,50,000 in any of the preceding three years – or in the first year, if newly set up – to maintain books of accounts. However, this section allows for some leeway.

This article does not aim to examine the interplay between professionals, books of accounts, taxation and audits; rather, it is primarily to realize that the new Act should now include more than just the types of professionals already specified in the statute. Shouldn’t the tax department update this obsolete list by way of notification or amendments?

The aforementioned section includes the following as professionals:

1. Legal
2. Medical
3. Engineering
<
Read More