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How a doctor's income is taxed
| Source | Head / treatment |
|---|---|
| Private clinic or practice | Profession — 44ADA or books of account |
| Visiting consultant fees from hospitals | Profession; hospital deducts 10% TDS (194J) |
| Salary as a hospital employee | Salary — Form 16 / 130 |
| Pharmacy run alongside the clinic | Business — 44AD or books; GST applies on medicine sales |
| Rent from a clinic building | House property |
GST for doctors and clinics
- Health-care services by doctors and clinical establishments are exempt — no GST on consultation or treatment
- Cosmetic and plastic surgery (other than to restore anatomy or function) is taxable at 18%
- Medicines supplied to in-patients as part of treatment are part of the exempt service; pharmacy sales over the counter are taxable
- Once you make any taxable supply, the registration limit (₹20 lakh for service providers) is tested on aggregate turnover — which includes exempt consultation receipts. A clinic with even a small pharmacy or cosmetic practice can cross it quickly
Expenses and planning (when not on 44ADA)
- Clinic rent, staff salaries, consumables, professional indemnity insurance, CME courses
- Depreciation on equipment and the clinic premises
- Car and phone used for practice — reasonable business share
- Old regime: 80C, 80D, NPS; new regime gives wider slabs and the ₹12 lakh rebate
Advance tax
Presumptive taxpayers pay their entire advance tax in one instalment by 15 March. You can always declare a higher income than the presumptive rate; declaring lower needs books and, above the basic exemption limit, a tax audit.
Worked example
Example: A dentist in Jind receives ₹48 lakh, almost all digitally. Under 44ADA income is ₹24 lakh. New-regime tax on ₹24 lakh = ₹3,00,000 + 4% cess = ₹3,12,000, paid as advance tax by 15 March. Hospital TDS of ₹60,000 is adjusted.
Common mistakes
- Not reporting hospital fees that appear in AIS
- Claiming expenses while also using 44ADA
- Ignoring GST on a growing pharmacy
Frequently asked questions
Not for exempt healthcare alone. If you also make taxable supplies — a pharmacy or cosmetic treatments — the threshold counts your exempt receipts too, so registration is often needed.
Yes — a partnership firm (not an LLP) can use 44ADA.
Last reviewed on 11 November 2026 by Vinay Jaglan, VJ & Associates. Law and portal screens change — verify before acting, or ask the office.
