Income tax for doctors in India under the 2025 Act The 50% presumptive scheme, books, audit, TDS and advance tax dates.

Income tax for doctors in India works on two tracks. A doctor who is resident in India and practises as an individual or a partnership firm can declare half of gross receipts as profit under the presumptive scheme in section 58 of the Income-tax Act, 2025, as long as receipts stay within ₹50 lakh (₹75 lakh when cash receipts are 5% or less). Anyone outside that scheme keeps books, pays tax on actual profit, and needs a tax audit once receipts in the profession cross ₹50 lakh. Salary from a hospital is taxed as salary on top, and the hospital deducts 10% on consultant fees. This post walks through each rule with its 2025 section, and gives the 1961 number in brackets for readers who know the old Act.

A note on the brackets. The Income-tax Act, 2025 (No. 30 of 2025) came into force on 1 April 2026 (section 1(3)) and applies to the tax year 2026-27 onwards; the rates for that year are set by the Finance Act, 2026 (No. 4 of 2026). We fetched both from the Gazette. The 1961 Act text on the Income Tax Department site was not reachable when we checked on 26 October 2026, so treat the old numbers as a guide for conversations with your CA and the 2025 sections as the citation.

The presumptive scheme: 50% of receipts as profit

Section 58(2) of the 2025 Act (old section 44ADA) sets out a table of presumptive schemes. Serial number 3 covers a "specified profession" as defined in section 62(4), and that definition lists "legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology or company secretary". A doctor is in. The assessee has to be a "specified assessee", which section 58(11)(b) defines as "an individual or a firm, other than a limited liability partnership, who is a resident in India". A private limited company or an LLP running the clinic cannot use it.

Two limits apply to gross receipts in the tax year. Column D of the table says the receipts must not exceed fifty lakh rupees, or must not exceed seventy-five lakh rupees "where the amount or aggregate of amounts received in cash does not exceed 5% of the gross receipts". Section 58(9) adds that a cheque or bank draft that is not account payee counts as cash for this test. UPI, card and account-payee cheques are the safe side of that line.

Within the limit, column E deems the profit to be "50% of the gross receipts or profit claimed to have been actually earned, whichever is higher". Section 58(4) then says that any loss, allowance or deduction allowable under the Act "shall not be allowed against the income computed in the manner specified in sub-section (2)". Rent, staff salary, consumables and depreciation are treated as already covered by the other 50%; you do not claim them again. Section 58(6) adds that the written-down value of your equipment is computed as if depreciation had been claimed every year, which matters only if you later leave the scheme or sell the asset.

The scheme takes no account of what the practice actually spent. A doctor whose real costs are 30% of receipts pays tax on 50% and keeps the simplicity; a doctor whose real costs are 60% pays more than on actual profit and may prefer to keep books.

What happens when you declare less than 50%

Section 58(3) is the opt-out clause. A specified assessee who claims that the actual profit is lower than 50%, and whose total income exceeds the maximum amount not chargeable to tax, "shall be required to" keep and maintain books of account under section 62 and get the accounts audited and furnish the audit report under section 63. Section 62(2)(c) and serial number 2 of the table in section 63 say the same from the other side. So for a doctor the cost of claiming a lower profit is books plus an audit for that year, whatever the receipts.

Section 58(7) does carry a five-year bar: an "eligible assessee" who declares presumptive profit and then departs from it in any of the next five years cannot use the section for the following five tax years. That sub-section is written for serial number 1 of the table, which is business, and section 58(11)(a)(iii) says an eligible assessee is one who "does not carry on specified profession". We did not find a parallel five-year bar for doctors in the Act. Ask your CA before relying on that reading, since the Rules and the return forms may add conditions we could not fetch.

Who must keep books of account

Section 62(1)(a) (old 44AA) says "any person carrying on specified profession" shall keep and maintain such books of account and other documents as enable the Assessing Officer to compute total income. The receipts and income thresholds in section 62(2) (₹1,20,000 of income or ₹10 lakh of receipts, raised to ₹2,50,000 and ₹25 lakh for an individual or HUF) are written for section 62(1)(b), which covers businesses and the professions that are not specified. In the Act itself, the duty on a doctor has no receipts threshold. What the books must contain, where they are kept and for how long are left to the Board to prescribe under section 62(3), and section 2(19) says books of account include "ledgers, day-books, cash books, account-books and other books" kept on paper, in electronic or digital form, or on cloud storage.

The prescribed list for doctors sits in the Income-tax Rules, 2026 (Notification No. 22/2026, G.S.R. 198(E), 20 March 2026). The Income Tax Department pages that host the Rules and the form were not reachable from our side on 26 October 2026, so we do not state the rule number, the register format or any threshold from them. Under the 1961 Act the doctor-specific list sat in Rule 6F of the old Rules; ask your CA which rule and register format replaced it in 2026, and keep whatever that rule lists.

The practical reading is simple. If you declare 50% under section 58(2), the Act does not ask for the section 62 books (section 63(2) also drops the audit). Keep the receipts record anyway, because the gross receipts figure is the whole return and the cash share decides your limit. The daily close described in our post on reconciling cash, UPI and card at the front desk produces exactly that record. If you are outside the scheme, keep the full prescribed set.

When a tax audit is required

Section 63(1) (old 44AB) requires a person "carrying on profession" to get the accounts audited by an accountant if "his gross receipts in profession exceed fifty lakh rupees in any previous year" (Table, Sl. No. 1(c)). The ₹1 crore and ₹10 crore limits in the same table are for business, not profession. Section 63(2) says the section does not apply where the profits declared are as per section 58(2). So a doctor with ₹60 lakh of receipts and cash under 5% can declare 50% under the presumptive scheme and needs no audit; the same doctor keeping books and claiming actual profit needs one.

The audit report has to be furnished by the "specified date", which section 63(5)(a) defines as one month before the due date for the return. Under section 263(1)(c), the return of a person whose accounts must be audited is due on 31 October; everyone else files by 31 July. Both dates fall in the financial year after the tax year.

TDS a hospital deducts on consultant fees

Section 393(1) of the 2025 Act (old 194J) carries the TDS table for payments to residents. Serial number 6(iii) covers "fees for professional services" paid by a "specified person", at 10% once the sum or aggregate in the year exceeds the ₹50,000 threshold. Section 402(37) defines a specified person as any person other than an individual or HUF, or an individual or HUF whose business turnover exceeded ₹1 crore or professional receipts exceeded ₹50 lakh in the preceding tax year. A hospital run as a company, trust, society or firm is a specified person, so the visiting consultant's fee comes to the doctor after a 10% deduction.

That deduction is your money. Section 390(5) says tax deducted at source and paid to the Central Government "shall be treated as payment of tax on behalf of the person from whose income such tax has been deducted". It comes back as credit against your final tax, and section 405 computes advance tax after subtracting tax deductible at source on income you have counted. Two statements show it. Form 26AS on the TRACES portal lists TDS, TCS and tax paid against your PAN. The Annual Information Statement (AIS), rolled out by the Income Tax Department on 1 November 2021 under the "Services" tab of the e-filing portal, shows the same plus other reported transactions, with a facility to submit feedback on a wrong or duplicate entry. The Department's notice says that where the TDS or tax-paid figures in Form 26AS and AIS differ, "the taxpayer may rely on the information displayed on TRACES portal". From May 2024 the AIS also shows whether the deductor has acted on your feedback.

1. Before you estimate advance tax, download Form 26AS and AIS for the year and total the TDS by each hospital.
2. Match each entry to the hospital's payment advice. A missing entry usually means the hospital has not filed its TDS statement yet, or filed it against the wrong PAN.
3. Raise feedback in AIS on wrong entries and write to the hospital's accounts desk for a correction statement; the credit shows only once the deductor files it.
4. Count the gross fee, before TDS, in your receipts. The ₹50 lakh and ₹75 lakh limits in section 58 are tested on gross receipts.

Advance tax: four dates, or one if you are presumptive

Section 404 makes advance tax payable when the tax for the year, after TDS, is ₹10,000 or more. Section 403(3) exempts a resident individual aged 60 or more only if they have no income under the head profits and gains of business or profession; a practising doctor has that income, so the exemption does not reach them. Section 408(1) fixes four instalments. Section 408(2) says an assessee who declares profit under section 58(2) (Table Sl. No. 1 or 3) "shall pay the whole amount of advance tax on the current income" on or before 15 March. Anything paid by 31 March still counts as advance tax for that year (section 408(3)).

Interest follows a shortfall. Under section 425(1) a doctor on the four-instalment track pays 3% on the shortfall at each of the first three dates and 1% at the fourth, with a cushion in section 425(2) if 12% is paid by 15 June and 36% by 15 September. Under section 425(3) a presumptive payer who falls short on 15 March pays simple interest at 1% on the shortfall. Section 424 adds 1% a month from 1 April if the advance tax paid is less than 90% of the assessed tax. Section 425(4) spares interest where the shortfall comes from business income arising for the first time, provided the tax is paid in a later instalment or by 31 March.

The cash limits that sit on top

Two cash rules apply whichever track you are on. Section 186 (old 269ST) bars receiving ₹2,00,000 or more in cash from one person in a day, for one transaction, or for one event, and section 451 lets the Assessing Officer impose a penalty equal to the sum received. Section 36(4) (old 40A(3)) disallows an expense paid in cash above ₹10,000 to one person in a day. The second rule has no bite on a presumptive doctor, since no expense is claimed, but the first one applies to everyone. The arithmetic and the daily closing sheet are in our post on closing the day at the clinic front desk.

Old regime or new: what each one lets a doctor deduct

Section 202 of the 2025 Act (old 115BAC) is the default. Its slab table starts at nil up to ₹4,00,000 and runs 5%, 10%, 15%, 20% and 25% in ₹4 lakh steps to 30% above ₹24,00,000. Section 202(2) computes income without the Chapter VIII deductions (except employer pension contributions and a few others it lists), and section 156(2) gives a rebate of the full tax up to ₹60,000 where total income does not exceed ₹12 lakh, with marginal relief just above it. A salaried doctor gets a standard deduction of ₹75,000 under this regime (section 19(1), Table Sl. No. 2).

The old regime is the option under section 202(4). Its rates come from Paragraph A of Part I-B of the First Schedule to the Finance Act, 2026: nil to ₹2,50,000, 5% to ₹5,00,000, 20% to ₹10,00,000, 30% above that, with the nil band at ₹3,00,000 for residents aged 60 to 79 and ₹5,00,000 at 80 or more. Section 156(1) gives a rebate up to ₹12,500 where total income does not exceed ₹5,00,000. The standard deduction on salary is ₹50,000. Chapter VIII deductions are available: section 123 (old 80C) allows up to ₹1,50,000 of the payments in Schedule XV such as life insurance premium and provident fund, and section 126 (old 80D) allows health insurance premium up to ₹25,000 for self and family and another ₹25,000 for parents, each rising to ₹50,000 where the insured person is a senior citizen, with ₹5,000 of preventive check-up inside those limits and payment by any mode other than cash except for the check-up.

Both regimes add surcharge only where total income exceeds ₹50 lakh (Finance Act, 2026, section 3(4)) and the Health and Education Cess at 4% of tax and surcharge (section 3(15)). One trap for a doctor with practice income: section 202(4)(a) says the option for the old regime is exercised before the return due date, applies to subsequent years, "may be withdrawn only once", and after that withdrawal the person "shall never be eligible to exercise the option" again while they have business or profession income. Make that choice with your CA.

A worked example, as an illustration

This is an illustration with round numbers, not advice, and it ignores any other income and any Chapter VIII deduction. Take a sample doctor who runs a single-doctor OPD and also sees patients two mornings a week at a private hospital. Gross receipts for tax year 2026-27 come to ₹36,00,000: ₹24,00,000 at the clinic, almost all by UPI and card with ₹1,20,000 in cash, and ₹12,00,000 in consultant fees from the hospital, which deducted 10% TDS. The doctor is a resident individual, the cash share is 3.3% (₹1,20,000 of ₹36,00,000), and receipts are under ₹50 lakh, so the practice qualifies under section 58(2) on either limit.

1. Deemed profit under section 58(2): 50% of ₹36,00,000 = ₹18,00,000. Total income ₹18,00,000.
2. Tax under section 202(1): nil on the first ₹4,00,000; 5% of ₹4,00,000 = ₹20,000; 10% of ₹4,00,000 = ₹40,000; 15% of ₹4,00,000 = ₹60,000; 20% of ₹2,00,000 = ₹40,000. Tax ₹1,60,000.
3. Rebate under section 156(2): none, since total income exceeds ₹12,00,000 and the tax is less than the ₹6,00,000 by which income exceeds that mark. Surcharge: none, income is under ₹50 lakh.
4. Health and Education Cess at 4% of ₹1,60,000 = ₹6,400. Total tax ₹1,66,400.
5. TDS already deducted by the hospital: 10% of ₹12,00,000 = ₹1,20,000, visible in Form 26AS. Balance ₹46,400.
6. ₹46,400 is above the ₹10,000 floor in section 404, so advance tax is payable. As a presumptive payer the doctor pays the whole ₹46,400 by 15 March 2027 (section 408(2)); a shortfall after that date carries 1% simple interest under section 425(3).
7. Return due 31 July 2027 (section 263(1)(c), Sl. No. 5), with no audit (section 63(2)).

Had the same doctor kept books and shown an actual profit of ₹12,00,000, the tax would have been lower, but the practice would have needed the section 62 books and a section 63 audit, the four-instalment advance tax calendar, and a 31 October return. Whether that is worth it depends on the real costs, and it is a conversation for the CA early in the tax year, while there is still time to keep books from 1 April.

Salaried at a hospital, private OPD in the evening

Many doctors draw a salary from a hospital or medical college and run an evening OPD. The salary is taxed under the head "Salaries" after the standard deduction in section 19, and the employer deducts tax on it monthly. The OPD receipts are income from profession and can go through section 58(2) on their own; the ₹50 lakh and ₹75 lakh limits are tested on the professional receipts, not on salary. Consultant fees paid by a hospital as fees, with 10% TDS, are professional receipts too, so add them to the OPD side.

Two things change once there is profession income. Advance tax applies to the combined tax after TDS (sections 404 and 405), and the section 403(3) exemption for seniors falls away. And the choice between regimes becomes sticky under section 202(4)(a), as set out above. A doctor who has used the old regime for years on salary alone, and now opens an OPD, should ask the CA about that election before the first return with profession income.

GST is a separate question

Nothing in the presumptive scheme speaks to GST. GST has its own registration threshold and its own exemption for health care services, and the answer turns on what the clinic sells besides consultations. Our post on GST on doctor consultation fees covers the exemption, the threshold and what to take to the CA.

A monthly bookkeeping routine for a presumptive doctor

The presumptive route drops the books, but the receipts still have to be counted. These seven steps, done on the first working day of each month, keep the receipts figure, the cash share and the TDS credit ready for March and July.

1. Total the month's receipts from the day book by mode: cash, UPI, card, bank transfer. Carry a running total for the year.
2. Compute the cash share of receipts to date. If it is drifting towards 5% and the year's receipts may pass ₹50 lakh, move routine payments to UPI or card now; the limit is tested on the whole year.
3. Add the hospital's consultant fees at the gross figure and note the TDS shown on the payment advice.
4. Check receipts of ₹2,00,000 or more from one patient or one event in cash. Section 186 is breached by the receipt, whether or not a receipt was issued.
5. File the month's bills, receipts and bank statement in one folder, paper or scanned. Even without section 62 books, the return reports gross receipts and the cash share, and you should be able to show where both came from.
6. In June, September, December and early March, compare receipts to date with the same months last year and re-estimate the year's tax; presumptive payers pay by 15 March, the others at each instalment.
7. In April, download Form 26AS and AIS, reconcile the year's TDS against the hospitals' advices, and hand the folder to the CA with the regime question written at the top.

Which reports to read every day, every week and every month, and how to spot leakage before the CA does, is in our post on daily reports a clinic owner should check.