List of Income Tax Documentation to be maintained by Doctors

Every Doctor should maintain regular and proper books of accounts supported by supporting vouchers for expenditure. If the accounts are found to be correct and complete supported by supporting voucher, expenditure actually incurred for the purposes of the profession shall be allowable irrespective of its quantum.

As per Income Tax Act, 1961 you can compute your income chargeable in accordance with either cash or mercantile system of accounting and this system should be regularly employed too.

For doctors and other specified professionals, section 44AA of the Income Tax Act, 1961 require compulsory maintenance of books of accounts. But Doctors and other specified professionals, whose Gross Receipts in the profession do not exceed the prescribed limit of Rs. 1,50,000/- in any one of the said preceding three years (or where the profession has been newly setup in the previous year, his Gross total receipts in the profession for that year are not likely to exceed the said amount) are not compulsorily required to maintain books of accounts as per section 44AA of the Income Tax Act, 1961.

But, that doesn’t mean that if you fall under the above category you don’t need to maintain any books of accounts. There is no such prescribed books of accounts for you all falling under the above category but you should maintain such “books of accounts and other documents” as may enable the Assessing Officer to compute your taxable Income under the Income Tax Act, 1961.

Prescribed books which are to be maintained by doctors and other specified professionals as per Section 44AA of the Income Tax Act,1961 are as follows:

a. A cash book (i.e., a record of all cash receipts and payments kept and maintained from day to day and giving the cash balance in hand of each day or at the year end of a specified period not exceeding a month);

b. a journal, if the accounts are maintained according to the mercantile system of accounting;

c. a Ledger;

d. carbon copies of bills (whether machine numbered or, otherwise serially maintained) exceeding Rs. 25, issued by you and carbon copies or counterfoils of machine numbered or otherwise serially numbered receipts issued by you;

e. original bills wherever issued to you and receipts in respect of expenditure incurred by you and where the expenditure incurred does not exceed 50 rupees, payment vouchers prepared and signed by you.

In addition to all the aforesaid Books of accounts and documents, Doctors are required to keep the following Books/documents:

a. A daily cash register in Form No. 3C, showing Date, SI. No., Patient’s name, Nature of Professional, i.e., general consultation, surgery, injection, visit, etc., Fees received, Date of Receipt.

b. An inventory under broad heads as on the first and last days of the previous year, of the stock of drugs, medicines and other consumable accessories used for the purpose of profession

All the aforesaid books of accounts and documents should be kept and maintained for a period of 6 years from the end of the relevant assessment year and at the place where you are carrying on the profession or where the profession is carried on in more places than one at the principal place of profession.

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