In this post, we have discussed the income tax provisions for doctors that should be remembered with the presumptive tax scheme. Doctors perform noble and busy professions in the country. They work for approximately 9×7 hours a week and maybe more to help the people in the fight against their sufferings.
They really do not have that amount of time to plan and take care of their finances and other taxation activities.
Still, from being one of the 10 highest income earners in the country, Doctors are required to keep themselves aware of some of the documentation and legal requirements, which are essential for every human being to follow to keep themselves away from the needless payment of tax, penalty and interest. All the income tax provisions for doctors are listed below:
Section 62 (Old Section 44AA with Rule 6F)
As per above section of income tax which includes doctors also and mandates the maintenance of books of accounts, However, no books of accounts are required to be prepared if the gross receipts in the profession do not exceed one lakh fifth thousand rupees in any one of the last three years, or, where the profession has been newly set up in the relevant year, his total gross receipts in the profession for that year are not likely to exceed the said amount.
Rule 46 (earlier 6F) defines the maintenance of books of accounts properly-
- Cash Book, Journal, Ledger
- Original bills, wherever issued to the person and receipts in respect of expenditure incurred by the person. Where such bills and receipts are not issued, and the expenditure incurred does not exceed 250 rupees, payment vouchers prepared and signed by the person
Other documents also need to be kept and maintained as per the specified sub-rule (3)
- Daily case register in Form No.25 (earlier 3C)
- Inventory Management for the stock of drugs, medicines and other consumable accessories used by doctors.
Note: The mentioned books of accounts and other documents need to be kept and maintained for seven tax years from the relevant tax year. If failed then doctors need to pay a penalty under section 441 of Rs. 25,000 need to pay by the doctors.
Recommended: How to E-File your Income Tax Return – Free Guide
Audit: Section 63 (Earlier 44AB)
In case of profession, if the overall collection during the previous year (April to March) was 50 Lakh or more (if the amount or aggregate of the amounts received during the previous year, in cash, does not exceed five per cent of the total gross receipts, then the limit will be Rs 75,00,000 instead of RS 50,00,000).
Then the defined books of accounts should be audited by a qualified practising Chartered Accountant.
Due Date:-
- Non-Audit Case for non-business: 31st July of the year
- Non-Audit Case for business: 31st August of the year
- Audit Case: 31st October of the year
Presumptive Tax Scheme for Professionals
Section 58 (Earlier 44ADA) is a part of the presumptive tax scheme. This section is meant for relaxation for small professionals, like non-maintenance of books, no tax audit required if gross receipts do not exceed Rs 50,00,000. This scheme is only for individuals & Partnership firms (other than an LLP as defined under clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008).
W.e.f. Finance Act 2023, if the amount or aggregate of the amounts received during the previous year, in cash, does not exceed five per cent of the total gross receipts, then the limit will be Rs 75,00,000 instead of RS 50,00,000.
To offer equality for both small professionals & businessmen and to calculate taxable income on the gross receipts or total assessed income on the presumptive basis, as higher than 50%.
