## Section 44AA — Compulsory Maintenance of Books of Account

Section 44AA prescribes when and which assessees must maintain books of account. The framework distinguishes between notified professions (stricter) and other businesses/professions.

### Notified Professions

The following are 'notified professions' under Sec. 44AA(1):

1. Legal

2. Medical

3. Engineering

4. Architectural

5. Accounting

6. Technical Consultancy

7. Interior Decoration

8. Film Artist

9. Company Secretary

10. Information Technology (IT) Professionals (Authorised Representative also included in extended list)

### Maintenance Requirements for Notified Professionals

(Detailed thresholds for notified vs. other businesses are typically covered in subsequent pages — the rule of thumb:)

Notified professionals: If gross receipts exceed ₹1,50,000 in any of the three immediately preceding years (or expected to exceed in case of new profession) → must maintain prescribed books under Rule 6F (cash book, journal, ledger, bills, receipts, etc.).
Below ₹1,50,000: maintain such books as enable the AO to compute total income.

### Why this section matters

Without proper books, the AO can resort to best judgment assessment, penalty under Sec. 271A (₹25,000), and the assessee loses presumptive benefits and standing in audit.

Worked example

### Example 1

Example 1: Dr. X (medical practitioner) has gross receipts of ₹4,00,000 in P.Y. 25-26 and similar receipts in prior years.

→ Medical is a notified profession. Receipts exceed ₹1,50,000 → Must maintain prescribed books under Rule 6F.

Example 2: Mr. Y is an IT consultant with receipts of ₹80,000 across all years.

→ Notified profession but below ₹1,50,000 threshold → Maintain books sufficient for AO to compute income (no Rule 6F obligation).

Example 3: Mr. Z is a trader (business, not notified profession) — separate rules apply (covered in later sections of the topic).

⚠️ Common exam mistakes

Treating teaching, music, dance etc. as 'notified profession' — they are NOT (only the 10 specified are).
Forgetting IT professionals and Company Secretary were later added to the notified list.
Confusing thresholds for 'notified profession' (₹1,50,000) with those for 'other business' (₹10/25 lakh receipts and similar income thresholds — separate framework).
Failing to maintain Rule 6F books when crossing threshold — attracts penalty ₹25,000 u/s 271A.

Bare-Act text Section 44AA read with Rule 6F · Income-tax Act, 1961 · click to expand

Section 44AA(1): Every person carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or any other profession as is notified by the Board in the Official Gazette shall keep and maintain such books of account and other documents as may enable the Assessing Officer to compute his total income in accordance with the provisions of this Act.

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Compulsory Maintenance of Books of Accounts [Section 44AA]

Worked example

⚠️ Common exam mistakes