Section 145: Method of accounting

The Income-tax Act, 1961Central Act · Act 43 of 1961

Repealed. This text is published for reference. It is not in force, and it should not be relied on as current law without checking what replaced it. Repealed by the Income-tax Act, 2025, with effect from 1 April 2026

Method of accounting.

(1) Income chargeable under the head "Profits and gains of business or profession" or "Income from other sources" shall, subject to the provisions of sub-section (2), be computed in accordance with either cash or mercantile system of accounting regularly employed by the assessee.

(2) The Central Government may notify in the Official Gazette from time to time income computation and disclosure standards to be followed by any class of assessees or in respect of any class of income.

(3) Where the Assessing Officer is not satisfied about the correctness or completeness of the accounts of the assessee, or where the method of accounting provided in sub-section (1) has not been regularly followed by the assessee, or income has not been computed in accordance with the standards notified under sub-section (2), the Assessing Officer may make an assessment in the manner provided in section 144.

Where this provision sits

Act	The Income-tax Act, 1961
Section	145
Marginal note	Method of accounting
Jurisdiction	Central
Status	Repealed
Judgments citing it	15

Judgments that turned on this provision

COMMISSIONER OF INCOME TAX VI vs VIRTUAL SOFT SYSTEMS LTD.Supreme Court of India · 2018-04-24
M/S. SOUTHERN TECHNOLOGIES LTD. vs JOINT COMMNR. OF INCOME TAX, COIMBATORESupreme Court of India · 2010-01-11
ITA/334/1999 of THE COMMISSIONER OF INCOME-TAX Vs DR.RAMSWAROOP M. SHARMAHigh Court of Gujarat · 2002-08-07

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