Ten weeks into the Income-tax Act, 2025, most commentary treats Section 62(4) as a housekeeping provision. It is the new home of an old list, and that is where the discussion usually ends. It should not. The closed list of “specified professions”, carried forward from Section 44AA(1) of the 1961 Act, decides two things that matter to lakhs of professionals: who can use presumptive taxation for professionals under Section 58 (the successor to Section 44ADA), and who must maintain books of account and face tax audit under Sections 62 and 63.
The recodification was a once-in-six-decades chance to fix this list. Instead, it was only edited.
What turns on the list
Under the 1961 Act, the list in Section 44AA(1) covered legal, medical, engineering, architecture, accountancy, technical consultancy and interior decoration, along with professions notified over the years. This list was the gateway to the 50% presumptive rate under Section 44ADA, and it shaped the book-keeping and audit obligations of professionals.
The 2025 Act keeps the same structure. Section 62(4) carries the list. Section 58 carries the presumptive regime. Sections 62 and 63 carry the books and audit obligations. So the old question remains: is this a specified profession or not? For a large class of taxpayers, the answer decides whether they file a one-line presumptive computation or run a full compliance apparatus.
Five defects, all carried forward
In a paper published on SSRN this month, I argue that the list suffers from five structural defects. The recodification fixed none of them.
1. The listed terms are not defined. The Act does not say what “technical consultancy” means. Six decades of disputes under the old provision show that taxpayers and Assessing Officers read it differently. A term that decides eligibility for an entire taxation regime should not rest on case-by-case improvisation.
2. The definition is split between the Act and the notifications. Part of the list sits in the statute; part has built up through notifications over the years. A taxpayer reading the bare Act sees an incomplete picture of his own eligibility. That is an odd position in a self-assessment system.
3. There is no stated principle for who is in and who is out. Why is a film artist a specified professional, but a management consultant is not? The Act gives no answer, because there is none. The list is an accumulation of history, not the result of any test.
4. The listed heads are of unequal precision. “Accountancy” is reasonably clear. “Technical consultancy” is not. Putting both in one list gives certainty to some taxpayers and litigation risk to their neighbours.
5. The list cannot grow. India now has digital creators, UX designers, data professionals and a widening band of tech-enabled and hybrid practices. None of these existed when the original list was drafted. A frozen list cannot see them, and each one becomes a fresh classification dispute.
Classification by assessment
Put these defects together and the result is uncomfortable. For many taxpayers, the question “do I carry on a specified profession?” is not answered by the statute at all. It gets settled during assessment, on an Assessing Officer’s reading of an undefined term. A part of the definition of the tax base has, in substance, been delegated to the assessment process. That is exactly the kind of uncertainty a recodification exists to remove.
Three groups pay the price most directly. The creator economy and digital professionals sit in classification limbo. Several regulated professions remain outside the list with no stated reason. And the formerly notified professions occupy a two-tier position between the bare Act and the rules. The 2025 Act entrenched this rather than resolving it: it promoted information technology and company secretary practice into the statutory text and left everything else as it was. Promoting two heads is editing. It is not reform.
The fix is a principle, not a longer list
The obvious remedy is to notify more professions. But that only postpones the problem to the next occupation Parliament has not yet heard of. The better course is to replace the list with a principled, self-updating test: where income is earned predominantly from personal professional skill, the profession qualifies. Define the principle, and the statute keeps pace with the economy on its own. No notifications, no litigation about labels, no two-tier classes of professionals. And unlike most reform proposals, this one costs the exchequer nothing. It costs only drafting effort.
The Income-tax Act, 2025 was the natural moment for this change. That moment has passed. The defect has not. The next Finance Act is always an opportunity.
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Disclaimer: This article reflects the author’s analysis of the statutory text and is intended for general professional discussion, not as advice on any specific matter.
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