section 193
Section 193 of Income Tax Act
July 27, 2018
Corporate Tax in India
July 28, 2018

How Can a Doctor File his Income Tax Return?

Last Update Date : September 10, 2018

tax filing guide for doctors

If you are a doctor, this guide is meant for you. It will help you understand your taxes including income tax return, documents to be maintained and non-compliance penalties etc.

Income Tax Rate for Doctors

A doctor needs to pay Income Tax as per the following slab rates. The Income Tax slabs for two Assessment Years and three age categories are given below:

Tax Rate for Doctors for the AY 2018-19 – Doctor’s age is below 60 Years

Income Range (in Rupees) Tax Rate (in %age)
Zero – 2,50,000 Nil
2,50,000-5,00,000 5%
5,00,000-10,00,000 20%
Above 10,00,000 30%
Less: Rebate u/s 87A – It is applicable even to doctors with income up to Rs 3,50,000. The maximum amount of rebate allowed is Rs 2,500.
Add: Surcharge – A surcharge @ 10% of tax is applicable if income lies between Rs 50 lakh to Rs 1 crore, but if it exceeds Rs 1 crore then the surcharge will be payable @ 15%. However, surcharge is subject to marginal relief as stated:§  If income exceeds Rs 50 lakh or Rs 1 crore as the case may be, the applicable tax plus surcharge should not exceed the part of income which is in excess to Rs 1 crore.Add: “Education Cess” and “Secondary and Higher Education Cess” shall be levied at the rate of 2% and 1% respectively, on the amount of tax computed, inclusive of surcharge.

Tax Rate for Doctors for the AY 2019-20 – Doctor’s age is below 60 Years

Income Range (in Rupees) Tax Rate (in %age)
Zero – 2,50,000 Nil
2,50,000-5,00,000 5%
5,00,000-10,00,000 20%
Above 10,00,000 30%
Less: Rebate u/s 87A –  It is applicable to doctors with income up to Rs 3,50,000. The maximum amount of rebate allowed is Rs 2,500.
Add: Surcharge – A surcharge @ 10% of tax is applicable if income lies between Rs 50 lakh to Rs 1 crore, but if it exceeds Rs 1 crore then the surcharge will be payable @ 15%. However, surcharge is subject to marginal relief as stated:§  If income exceeds Rs 1 crore, the applicable tax plus surcharge should not exceed the part of income which is in excess to Rs 1 crore.Add: “Education Cess” and “Secondary and Higher Education Cess” will be replaced by “Health and Education Cess” at the rate of 4%, on the amount of tax computed, inclusive of surcharge.

Tax Rate for Doctors for the AY 2018-19 – Doctor’s age is between 60 and 80 Years

Income Range (in Rupees) Tax Rate (in %age)
Zero – 3,00,000 Nil
3,00,000-5,00,000 5%
5,00,000-10,00,000 20%
Above 10,00,000 30%
Less: Rebate u/s 87A – It is only applicable to doctors with income up to Rs 3,50,000. The maximum amount of rebate allowed is Rs 2,500.
Add: Surcharge – A surcharge @ 10% of tax is applicable if income lies between Rs 50 lakh to Rs 1 crore, but if it exceeds Rs 1 crore then the surcharge will be payable @ 15%. However, surcharge is subject to marginal relief as stated:§  If income exceeds Rs 50 lakh or Rs 1 crore as the case may be, the applicable tax plus surcharge should not exceed the part of income which is in excess to Rs 1 crore.Add: “Education Cess” and “Secondary and Higher Education Cess” shall be levied at the rate of 2% and 1% respectively, on the amount of tax computed, inclusive of surcharge.

Tax Rate for Doctors for the AY 2019-20 – Doctor’s age is between 60 and 80 Years

Income Range (in Rupees) Tax Rate (in %age)
Zero – 3,00,000 Nil
3,00,000-5,00,000 5%
5,00,000-10,00,000 20%
Above 10,00,000 30%

Less: Rebate u/s 87A – . It is applicable to doctors with income up to Rs 3,50,000. The maximum amount of rebate allowed is Rs 2,500
Add: Surcharge –  A surcharge @ 10% of tax is applicable if income lies between Rs 50 lakh to Rs 1 crore, but if it exceeds Rs 1 crore then the surcharge will be payable @ 15%.. However, surcharge is subject to marginal relief.§  If income exceeds Rs 1 crore, the applicable tax plus surcharge should not exceed the part of income which is in excess to Rs 1 crore.

Add: “Education Cess” and “Secondary and Higher Education Cess” will be replaced by “Health and Education Cess” at the rate of 4%, on the amount of tax computed, inclusive of surcharge.

Income Tax Rate for Doctors for the AY 2018-19 – Doctor’s age is above 80 Years

Income Range (in Rupees) Tax Rate (in %age)
Zero – 5,00,000 Nil
5,00,000-10,00,000 20%
Above 10,00,000 30%

Add: Surcharge – A surcharge @ 10% of tax is applicable if income lies between Rs 50 lakh to Rs 1 crore, but if it exceeds Rs 1 crore then the surcharge will be payable @ 15%. However, surcharge is subject to marginal relief as stated:

§  If income exceeds Rs 50 lakh or Rs 1 crore as the case may be, the applicable tax plus surcharge should not exceed the part of income which is in excess to Rs 1 crore.

Add: “Education Cess” and “Secondary and Higher Education Cess” shall be levied at the rate of 2% and 1% respectively, on the amount of tax computed, inclusive of surcharge.

Income Tax Rate for Doctors for the AY 2019-20 – Doctor’s age is above 80 Years

Income Range (in Rupees) Tax Rate (in %age)
Zero – 5,00,000 Nil
5,00,000 – 10,00,000 20%
Above 10,00,000 30%

Add: Surcharge –  A surcharge @ 10% of tax is applicable if income lies between Rs 50 lakh to Rs 1 crore, but if it exceeds Rs 1 crore then the surcharge will be payable @ 15%. However, surcharge is subject to marginal relief.

§  If income exceeds Rs 1 crore, the applicable tax plus surcharge should not exceed the part of income which is in excess to Rs 1 crore.

Add: “Education Cess” and “Secondary and Higher Education Cess” will be replaced by “Health and Education Cess” at the rate of 4%, on the amount of tax computed, inclusive of surcharge.

Sources of Income for Doctors

There can be various sources of income for a doctor. However, the doctors make most of the money from two broad sources:

  • Salary income from hospitals and clinics
  • Professional services income (Proprietorship, Partnership, Company)

Salary income from hospitals and clinics

As a doctor, if you are employed in a hospital and receive salary, you do not need to worry about maintaining any books of account. Your employer deducts TDS and submits it to the government. You will receive Form 16 from the employer which will be helpful in filing return.

Income from professional services

If you are a doctor who renders professional services as a consultant or you operate your own clinic, nursing home or hospital then you will be required to maintain your books of account as per the provisions of section 44AA of the I-T Act if the gross receipts from your profession exceed Rs. 1,50,000 in any of the 3 years immediately preceding the current previous year, or is likely to exceed Rs 1,50,000 in the current previous year.

Why should Doctors File Income Tax Return?

You can claim almost all deductions available to an individual by filing income tax return. However, as a doctor, there are additional ways in which you can save taxes. There are various expenses on which tax deductions can be claimed:

  • All direct expenses like salaries paid to assistant doctors, nurses, or other help
  • Expenses related to your profession like in attending conference
  • Expenses incurred on consumables during your medical treatment
  • Money spent on general repairs and maintenance of the equipment
  • Maintenance expenditure related to housekeeping
  • Indirect expenditure such as to administrative staff salaries, payment to parking and rent of the building if the building is taken on lease
  • You can claim the deduction on various bills like rent, electricity and maintenance of your home if you practice from home i.e., use your home as your work place.

Due Date for Doctors to File Income Tax Return

The due date to file return varies depending upon whether you have to undergo tax audit or not.

  • Due date in non-audit cases: 31st July of the year
  • Due date in audit cases: 30th September of the Year

Income Tax Return for Doctors

For the assessment year 2018-19, which relates to income earned in the Financial Year 2017- 18, doctors are required to file Form ITR-3 or Form ITR-4-Sugam.

Form ITR-1

If you are employed by a hospital or clinic which gives your salary, then you need to file ITR-1.

Form ITR-2

If you are a salaried doctor but also had incurred capital gains in the relevant Financial Year, then you need to file ITR2 Form.

Form ITR-3

Form ITR-3 is to be filed by a doctor who is carrying out a proprietary business or profession.

Form ITR-4-Sugam

Form ITR-4-Sugam is to be filed by a doctor who has paid income tax under the presumptive taxation scheme.

Filing Income Tax Return

The income tax return of a proprietorship firm in form ITR 3 or ITR 4 Sugam can be filed online on the e-filing portal of the government using the digital signature of the proprietor or through generating an EVC or generating an Aadhaar OTP or manually.

If the income tax return is filed manually, then e-verification is not possible. In such a case, the proprietor should print out two copies of Form ITR-V. One copy of ITR-V, duly signed by the proprietor, has to be sent by ordinary post to the Jurisdictional ITO who issues an acknowledgement.

How can H&R Block help you?

Saving taxes and filing income tax return accurately becomes very easy when you have professional help. This is where we come into the picture. We have a team of in-house tax experts who can file your tax return accurately while giving you maximum tax benefits.

Documents to be maintained as per Section 44AA with Rule 6F

Make sure that you maintain the following books of account to avoid any penalty:

  • A Cash Book: It is a book of accounts where day to day cash transactions, i.e. cash payments and receipts are recorded.
  • A Journal: A profession should maintain a journal as per the mercantile system of accounting. In this journal, day to day transactions are recorded using double entry system of accounting.
  • Ledger: A ledger where all entries flow from the journal, has details of all accounts, this can be used to prepare the financial statements.
  • Photocopies of Bills: Keep photocopies of all such bills which exceed Rs 25 in value.
  • Original Bills: Keep original bills and receipts of your expenses safely with you. In cases where your expenses exceeded Rs 50 but you were not issued any bill or receipt then you should get payment vouchers prepared and signed by the concerned person.
  • Being a medical professional, you need to maintain some additional documents specified in sub-rule (2).
    • A daily case register in Form No. 3C.
    • An inventory as on the first and the last day of the previous year, of the stock of drugs, medicines and other consumable accessories used for the purpose of his profession.
    • The books of account and other documents specified in sub-rule (2) and sub-rule (3) shall be kept and maintained for period of eight years from the end of the relevant assessment year.

Audit under Section 44AB

Doctors also need to get their books of account audited if their income exceeds a specified threshold. You should get your books of account audited by a Chartered Accountant if your gross fee collection exceeds Rs 50 Lakhs.

Presumptive Income Scheme for Doctors

Doctors can get some relief in tax compliance by opting for the presumptive income scheme under section 44ADA. If you opt for this scheme, you will become exempt from maintaining books of account and getting them audited if your gross receipt does not exceed Rs 50,00,000. This scheme is only available for resident professionals.

To offer equality for both small professional & businessmen and to calculate taxable income on the gross receipt or total assessed income on the presumptive basis as higher of 50%.

Penalties for Non-Compliance

  • Penalty for non-maintenance of books of accounts is Rs 25,000 as per section 271A of the Income Tax Act.
  • Penalty for non-complying with tax audit is Rs 1,50,000 or 1/2% of gross receipt whichever is lower as per section 271B of the Income Tax Act.
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