CA Preeti Parasrampuria

Taxation for Doctors: A Gist

Doctors are responsible for increased life expectancy and improved well-being in society. In today’s time Doctors are one the busiest professionals and thus have little time to cater to their taxation matters. You can handle the greatest of ailments with ease, but going through tax filing may be mortifying to you. As a medical professional, you need to be aware of taxation rules and regulations that are relevant to you. Following them is important for not only paying your taxes correctly but also availing of the relevant benefits.

The following pointers will come in handy to help you in filing your taxes:

Income Tax

  • Books of Accounts (Sec 44AA read with rule 6F):

Doctors whose gross receipts are more than 1.5 lakhs per annum must maintain following books of accounts

    • Cash book
    • Journal
    • Ledger
    • Copies of bill
    • Daily Cash register with details of patients, services rendered, fees received and date of receipt.
    • Details of stock of drugs, medicines and other consumables used.
  • Income Tax Returns: (Sec 139(1))
    • Everyone with total income of more than Rs 2.5 Lakhs in a financial year must file an Income tax return.
    • Due date for filing income tax returns: Non Audit: 31st July / Audit: 31st October
  • Audit:(Sec 44AB)
    • All professionals having receipts above Rs 50Lakhs should get the accounts audited.
    • Or when your receipts are under Rs 50 lakhs but your profit is lower than 50%.
    • Due date for furnishing Audit Report : 30th September
    • Doctors falling under Audit ambit need to deduct and pay TDs and file TDS Returns
  • Presumptive Tax scheme:(Sec 44ADA)
    • Professionals having receipts below 50 Lakhs can opt for this scheme and declare income above 50% of receipts without having need to maintain proper books of accounts.
  • Tax Saving
    • U/s 80C : Invest up toRs150000/- in
      • Equity-linked savings scheme (ELSS) mutual funds (Avg return 12 to 15%)(Lock in 3years)
      • Public Provident Fund (PPF) (8.1%) (15 years)
      • National Pension System (NPS) (8 to10%) (on retirement)
      • Tax Saving Fixed Deposits ( 6 to 8%) ( 5 years)
      • Life Insurance, Repayment of principal amount of home loan, children’s school fees etc.
    • 80CCD (1B):National Pension Scheme (NPS) Rs 50000/- this is over and above deduction u/s 80C
    • U/S 80D : Medical insurance up toRs75,000/-

Profession Tax

  • Doctors need to obtain Profession tax Enrolment Number and pay Rs 2500/- per annum.
  • Doctors employing staff need to obtain Profession tax Registration Number & deduct and pay Profession tax of staff as per slab.

GST

  • GST regime provides significant benefit to healthcare services considering how essential these services are for the country as a whole.
  • Healthcare Services by a Clinical Establishment or Authorized Medical Practitioner or Para medics are exempt from Goods and services tax.
  • Hair transplant treatments, cosmetic surgery, plastic surgery treatments which have no medical or reconstructive purposes are taxable.
  • Sale of medicines is taxable

For further queries write us an e-mail on [email protected] or call us on 9820923304.

More Under Income Tax

2 Comments

  1. CA.NGS RAO says:

    Timely, well thought out, logical guidance.
    A REAL PROFESSIONAL SERVICE AND GOOD
    GUIDANCE, THAT TOO TIMELY, IN ADVANCE to get prepared. Particularly an eye-opener to young new generation of professionals. Hope many more would participate in this MAHA YAGNA

  2. B M Nagaraju says:

    If not charging for Medicine but receiving the fees including the cost of medicine, what is the position of tax liability of GST on Medicine given to patients

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