Presumption as to assets, books of account, etc.
[As per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 524(1) of Income Tax Act 2025
524(1) Where any books of account, other documents money, bullion, jewellery, virtual digital asset or other valuable article or thing, is found in the possession or control of any person in the course of a search under section 247 or survey under section 253, it may, in any proceeding under this Act, be presumed—
- 524(1)(a) that such books of account, other document, money, bullion, jewellery, virtual digital asset or other valuable article or thing belong or belongs to such person;
- 524(1)(b) that the contents of such books of account and other document are true;
- 524(1)(c) that the signature and every other part of such books of account and other document, which purports to be in the handwriting of any particular person, or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in the handwriting of that person; and
- 524(1)(d) in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested article or thing belong or belongs to such person;
Section 524(2) of Income Tax Act 2025
524(2) Where any books of account, other documents or assets have been delivered to the requisitioning officer as per section 248, then, the provisions of sub-section (1) shall apply as if such books of account, other documents or assets, which had been taken into custody from the person referred to in sub-section (1)(a) or (b) or (c) of the said section, had been found in the possession or control of that person in the course of a search under section 247.
FAQs on Section 524 of the Income Tax Act, 2025
FAQs regarding Presumption as to Assets, Books of Account, etc., under Section 524 of the Income Tax Act, 2025:
- What is Section 524 of the Income Tax Act, 2025?
Section 524 deals with presumptions related to books of account, documents, money, bullion, jewellery, virtual digital assets, or other valuable articles found during a search or survey by tax authorities. - What is the significance of Section 524 in tax proceedings?
This section allows tax authorities to presume ownership, authenticity, and validity of documents, assets, and signatures found in possession of a person unless proven otherwise. - When does Section 524 apply?
It applies when assets or documents are found during a search (Section 247) or survey (Section 253) or when they are requisitioned by a tax officer (Section 248).
- What are the key presumptions under Section 524(1)?
(a) The found assets or documents belong to the person in possession.
(b) The contents of books of account and documents are true.
(c) The signatures and handwriting in the documents belong to the person it claims to be from.
(d) If a document is stamped, executed, or attested, it is presumed to be duly stamped and executed. - Can a person challenge these presumptions?
Yes, but the burden of proof lies on the person to provide evidence that contradicts the presumptions. - Do these presumptions apply to virtual digital assets (like cryptocurrency)?
Yes, virtual digital assets are specifically mentioned, meaning they can also be presumed to belong to the person in possession unless proven otherwise.
- What does Section 524(2) state?
If books of account, documents, or assets are requisitioned under Section 248, they are treated as if found in a search under Section 247 and the same presumptions apply. - Who is a requisitioning officer under Section 248?
A requisitioning officer is an income tax authority who demands documents or assets from a person or entity as part of an investigation.
- Why is Section 524 important for commerce and law students?
It helps students understand taxation, forensic accounting, and legal aspects of financial investigations. - How can students use this knowledge in practice?
Aspiring chartered accountants or tax consultants can use this for tax planning and dispute resolution. Law students can understand how tax cases are argued and defended. Finance students can learn how tax investigations affect financial planning.
Section 524 of the Income Tax Act, 2025, establishes presumptions regarding books of account, documents, and assets found during a search (Section 247) or survey (Section 253) or requisitioned under Section 248. It presumes that such items belong to the person in possession, their contents are true, and any signatures or handwriting are authentic unless proven otherwise.
This applies to money, bullion, jewellery, virtual digital assets, and other valuables. While these presumptions strengthen tax enforcement, individuals can challenge them by providing contrary evidence. This section is crucial for tax professionals, lawyers, and finance students to understand tax investigations and compliance.
