Taxation of professional fees of doctors

Doctors are most busiest professional.They are believed to be top 10 earner in the economy.As doctors are busy so they don’t get time for referring Income Tax provisions.Hence in this article we have detailed taxation of professional fees of doctors and thus we will guide you for tax planning and its compliance if you are a doctor.

Taxation of professional fees of doctors
Taxation of professional fees of doctors
Taxation of professional fees of doctors
Books of account and documents to be maintained for professional whose gross receipt exceed Rs.1.5lakhs in any one of the last three year as per section 44AA read with rule 6F: Includes Journal,Cash book,Ledgers,xerox of bills exceeding Rs.25.
Apart from above doctors also need to maintain daily case register in form no.3C  and inventory management register of medicines,drugs and other consumables used in the profession of doctor.
Period of maintenance of above books and documents:8 year from the end of relevant assessment year.
Penaly for non maintenance of above books and documents is Rs.25000.
Filing of income tax returns:Any person who has total income from all sources of income more than Rs.2.5lakhs in a financial year is required to file income tax return.
Taxation scheme for doctors:
  • Taxation under section 44AB
  • Taxation under presumptive scheme of tax
Below we have explained both the scheme:
Taxation under section 44AB:If doctors are having gross receipt exceeding Rs.50lakhs and your total income is more than Rs.2.5lakhs during a financial year they are required to get their accounts audited by practicing chartered accountants.
Taxation under presumptive scheme of tax under section 44ADA:Under this scheme profit is not required to calculate and also minimal books of accounts are required to maintain like bills book,bank statement and receipt book must be kept for cross checking.Under this scheme 50% of gross receipt is taxable income.If assessee has profit less than 50% of gross receipt than compulsory audit is required under this scheme.Only assessee having gross receipt less than Rs.50lakhs can opt this scheme.Under this scheme advance tax is not required to pay in installment likewise under section 44AB nut it can be paid by 15th march in entire.
Eligibility of presumptive income under section 44ADA:Individual and HUF can opt for presumptive scheme of tax.Other than individual and HUF like company cannot adopt presumptive scheme of tax.Also assessee need to be resident as per Income Tax Act to opt  for this scheme.
Under section 271B of income tax non compliance with audit attracts penalty of Rs.1,50,000 or 1/2% of gross receipt whichever is low.
 Thus above are the provisions of taxation of professional fees of doctors.
Owner of this information can be reached at K M GATECHA & CO LLP.

Important note: This does not lead to legal advice or legal opinion and is personal view and for information purpose only. It is prepared on  the basis of facts available and applicable law.It is suggested to go through applicable provisions of law,latest regulations,judicial announcements, circulars, notifications and clarifications  etc before taking any action based on above content.You agree here by that for any action taken on basis of above information in any manner writer or K M GATECHA & CO LLP is not responsible or liable for  any omission,reliability,accuracy,completeness,errors or authenticity.This work by professional is just for knowledge purpose and does not constitute any kind of  solicitation of work or advertisement.