A self-employed doctor with gross receipts up to Rs 75 lakh can use Section 44ADA and pay tax on just 50% of receipts — no books of account and no tax audit. Hospitals and corporates deduct TDS at 10% under Section 194J on professional fees. Healthcare services are GST-exempt; only cosmetic/aesthetic procedures attract 18% GST. Salaried doctors are taxed under Section 192 at slab rates.
From FY 2023-24 the 44ADA ceiling rose from Rs 50 lakh to Rs 75 lakh — but the higher limit applies only if cash receipts are 5% or less of total gross receipts. If more than 5% of your receipts are in cash, the limit stays at Rs 50 lakh. Most clinics collecting via UPI, card and bank transfer meet the condition easily.
Section 44ADA — Presumptive Tax for Doctors
Section 44ADA applies to professions specified under Section 44AA(1), which expressly includes the medical profession — physicians, surgeons, dentists and similar practitioners. It is the simplest way for a private-practice doctor to be taxed.
- Gross-receipts limit: Rs 75 lakh a year (Rs 50 lakh if cash receipts exceed 5%).
- Deemed profit: 50% of gross receipts is treated as taxable income — no need to itemise actual expenses.
- No books, no audit: books of account under 44AA and tax audit under Section 44AB are not required while you stay in the scheme.
- You may declare higher than 50%, but declaring lower means keeping books and getting a tax audit.
- Advance tax for 44ADA is payable in a single instalment by 15 March.
If your real net margin is under 50% and you want to declare the lower actual profit, you must opt out of 44ADA, maintain regular books and get a tax audit under Section 44AB (and your income must exceed the basic exemption limit). Many doctors with heavy equipment or staff costs are better off on regular books than on 44ADA.
Not sure if 44ADA or regular books saves you more?
Talk to a CA →Tax Treatment by Income Type
Doctors earn in several ways — private practice, hospital salary, visiting-consultant fees, teaching. Each maps to a different ITR form, TDS section and audit position.
| Income Type | ITR Form | Section | TDS | Audit? |
|---|---|---|---|---|
| Private clinic / consultation (self-employed) | ITR-4 (44ADA) or ITR-3 | 44ADA / 28 | 194J · 10% | No · if 44ADA & ≤75L |
| Salary from hospital / employer | ITR-1 or ITR-2 | Section 192 | Slab rates | No |
| Surgery / procedure fees from hospitals | ITR-4 or ITR-3 | 44ADA / 28 | 194J · 10% | No · if 44ADA |
| Teaching / lecture / CME income | ITR-4 or ITR-3 | 44ADA / 28 | 194J · 10% | No · if 44ADA |
| Gross receipts > Rs 75 lakh | ITR-3 | Section 28 | 194J · 10% | Yes · 44AB |
194J TDS applies where a single payer's professional fees exceed Rs 30,000 in the year. Employed doctors have TDS under Section 192 (slab), not 194J.
TDS on a Doctor’s Fees — Section 194J
When a hospital, nursing home, diagnostic chain or company pays professional/consultation fees to a doctor, it deducts TDS at 10% under Section 194J once total payments cross Rs 30,000 in the year. This TDS is not a final tax — it is credited against your total liability and refunded if excess. A salaried doctor instead has TDS under Section 192 on slab rates.
- Match 194J credits with Form 26AS / AIS before filing
- Claim excess TDS as a refund in your ITR
- Report all hospital and clinic receipts, even below Rs 30,000
- Pay 44ADA advance tax by 15 March to avoid 234B/234C interest
GST for Doctors — Healthcare Exempt, Cosmetic Taxed
Healthcare services by an authorised medical practitioner or clinical establishment are fully exempt from GST under Entry 74 of Notification 12/2017-Central Tax (Rate). Pure medical practice needs no GST registration, whatever the turnover.
- OPD consultation, IPD treatment, surgery and diagnostics — all GST-exempt.
- No GST registration for purely medical income, regardless of annual turnover.
- Cosmetic / aesthetic procedures that are not medically necessary attract 18% GST.
- If cosmetic income crosses Rs 20 lakh a year, GST registration becomes mandatory for that stream.
GST exemption on healthcare has no bearing on income tax — a GST-exempt doctor still pays income tax on 44ADA deemed profit or on actual profit. Conversely, running cosmetic services may pull you into GST while your medical income stays exempt. Keep the two streams clearly separated in your books.
Old vs New Regime for Doctors
The new tax regime under Section 115BAC is the default from FY 2023-24, with lower slabs but almost no deductions. Self-employed doctors with real expenses or big 80C/80D claims often still gain from the old regime. Compare with our old vs new regime calculator.
Old regime — deductions allowed
- Section 80C up to Rs 1.5 lakh (LIC, PPF, ELSS)
- Section 80D health insurance Rs 25k / 50k
- Clinic rent, staff salary, consumables (regular books)
- Depreciation on equipment u/s 32 (non-44ADA)
- Best when deductions/expenses are high
New regime (default) — few deductions
- Standard slab deductions disallowed (80C, 80D)
- Standard deduction Rs 75,000 (salaried doctors)
- Rebate u/s 87A up to Rs 12 lakh taxable income
- 44ADA 50% presumptive rule still applies
- Simpler — best with few deductions
The 50% presumptive deeming under 44ADA applies whichever regime you pick. On the old regime you can further claim 80C, 80D and 80CCD(1B) out of that deemed income; on the new regime you get the lower slabs and 87A rebate but not those deductions. Run both before filing.
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Get ITR Filing Help →Income Tax for Doctors — Frequently Asked Questions
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Doctor ITR, 44ADA & TDS — Handled End to End
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