Records to be maintained by doctors under Income Tax Laws

The Indian Income Tax law requires maintenance of accounts by every person carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or authorized representative or film artist or, information technology.

However, there is no need to maintain the same, if the total gross receipts in the profession do not exceed Rs. 150, 000 in any of three tax years immediately preceding the relevant year or if the profession has been newly set up in the relevant year and the gross receipts in the profession for that year are not likely to exceed the said amount.

Further, following books of accounts have been prescribed to be kept and maintained:

  • a Cash Book;
  • a Journal, if the accounts are maintained as per mercantile system of accounting;
  • a ledger;
  • carbon copies of bills and they should be  serially numbered and carbon copies or counterfoils of receipts issued in respect of sums exceeding Rs 25/-,
  • original bills for expenses exceeding Rs. 50 and payment vouchers for petty expenses. But in a case where the cash book maintained by the person contains adequate particulars in respect of the expenditure incurred by him, then vouchers are not necessary in respect of expenses upto Rs 50.

In addition to above, a person carrying on medical profession shall, in addition, required to maintain a daily case register in the prescribed Performa as shown below:

Date SI. No. Patient’s name Nature of Professional, i.e., general consultation, surgery, injection, visit, etc. Fees received Date of Receipt
1 2 3 4 5 6

The Professional in this category is also required to maintain an inventory under broad heads, as on the first and the last day of the previous year, of the stock of drugs, medicines and other consumables accessories used for the purpose of the profession.

These books of accounts and other documents should be preserved for at least 6 years from the end of relevant assessment year and the current year’s books of accounts should be maintained and kept at the principal place of profession.

Failure to maintain books of accounts and other documents or to retain them as required attracts penalty of Rs. 25,000. The penalty can be imposed by the assessing officer or the higher authority.

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