Do freelancers need to keep books of account?
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Short answer
Often yes. Section 62(1)(a) of the Income-tax Act, 2025 requires anyone carrying on a specified profession, such as information technology, engineering or architecture, to keep books, and rule 46 of the Income-tax Rules, 2026 prescribes the books for most of those professions unless gross receipts did not exceed ₹1,50,000.12 Other individual freelancers must keep books once professional or business income exceeded ₹2,50,000 or receipts exceeded ₹25 lakh in any of the three preceding years, or if they declare less than the presumptive deemed profit.1
Books of account are the records from which your income can be computed: a cash book, ledger, invoices issued, bills for expenses and bank records. A developer in Chennai, a content writer in Kolkata and an architect in Ahmedabad are treated differently under section 62 of the Income-tax Act, 2025, which applies to income earned from 1 April 2026.1
Who must keep books under section 62?
Section 62(1) covers two groups:1
- Specified professions. Anyone carrying on legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology or company secretary work, or a profession CBDT notifies, must keep books, with no income test in the Act.1
- Everyone else in business or profession, if a condition in section 62(2) is met.1
For an individual or Hindu undivided family, the section 62(2) conditions are:1
| Condition | Threshold |
|---|---|
| Income from business or profession in any of the three preceding years | Exceeds ₹2,50,000 |
| Turnover or gross receipts in any of the three preceding years | Exceeds ₹25 lakh |
| Newly set up business or profession | Likely to exceed either figure in the year |
| Presumptive taxpayer under section 58(2) | Claims income lower than the deemed profit |
Which books does rule 46 prescribe?
Rule 46(2) applies to persons carrying on legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, authorised representative or film artist work.2 Rule 46(4) lists a cash book, a journal if accounts are on the mercantile system, a ledger, copies of bills or receipts issued for ₹250 or more, original bills for expenditure of ₹250 or more, and signed payment vouchers for smaller expenses where the cash book lacks detail.2
Rule 46(3) switches this off where gross receipts from the profession did not exceed ₹1,50,000 in any one of the three preceding years.2 For everyone else, rule 46(1) only requires books that let the Assessing Officer compute total income.2
What does a freelancer with foreign clients need in practice?
For foreign income the useful set is: each invoice with its foreign currency amount, the bank credit or Foreign Inward Remittance Advice (FIRA) showing the rupees received, a ledger of receipts and expenses, and bills for equipment and software. That also supports a foreign tax credit or a tax audit if either arises.
Keep electronic books accessible in India with daily back-ups on servers in India, and retain them for seven tax years.2 The practical checklist is in bookkeeping for foreign income. If you are unsure whether your work is a specified profession, see the section 62 guide and confirm with a chartered accountant (CA). Declaring below the presumptive figure also brings an audit under section 58(3).3
How did we verify this?
We checked this page against the sources below on 28 October 2026. Read our methodology or report an error.
Frequently asked questions
How long must I keep my books?+
Rule 46(9) requires the prescribed books and documents to be kept for seven tax years from the end of the relevant tax year.2
Can I keep my books in cloud accounting software?+
Rule 46(8) says books kept electronically must remain accessible in India at all times, with a daily back-up on servers physically located in India.2 Check where your software stores its back-ups.
Does a freelancer on the 50% presumptive scheme need books?+
Section 58(3) requires books and an audit if you declare less than the deemed profit and your total income exceeds the exemption limit. How section 62(1)(a) applies to a specified professional who declares 50% or more is a point to confirm with a CA.13
I just started freelancing this year. Which test applies?+
For a newly set up profession, section 62(2)(b) and (d) look at whether income is likely to exceed ₹2,50,000 or receipts ₹25 lakh in that year, for an individual.1
This page is general information for Indian service exporters, not tax or legal advice. Rules change and outcomes depend on your facts, so confirm with a chartered accountant before acting.
Keep reading
How should an Indian freelancer keep books for foreign income?
What books an Indian freelancer with foreign clients must keep under section 62 and rule 46, for how long, and how to record each foreign receipt for tax and FEMA.
TaxWhich professions are 'specified professions' under section 62 of the Income-tax Act, 2025?
The specified professions in section 62(4) of the Income-tax Act, 2025, what they decide (books, presumptive tax), and how designers, writers and tutors fit.
TaxWhen does an Indian freelancer need a tax audit?
When an Indian freelancer or agency needs a tax audit under section 63 of the Income-tax Act, 2025: the ₹50 lakh, ₹1 crore and ₹10 crore limits, presumptive cases, dates.
TaxHow do you account for a foreign currency invoice in India?
How Indian freelancers and agencies record USD, EUR or GBP invoices in rupees: the rate on the invoice date, year-end restatement, and exchange differences.