Income tax for a doctor dispensing medicines

Yes, you can file the taxes u/s 44ada and 50% of your income will be taxable income. Please note you are not eligible for 8%.

Hi,

Yes, you can do the same.

Are you showing two seperate business or consultation fees includes supplying of medicine as well.

If you have two seperate business accounting then you can go for 50% for consultation. And 8% for medicine supply.

If you are showing it as part of consultancy then its better to go for 50% for total receipts

If you are giving bill for medicine, you can go for 8% presumptive. I would recommend you to do separate billing for consultancy and separate billing for medicines.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.com

According to you, supply of medicines is supplementary and part and parcel of your medical consultancy and you charge for the same without issuing separate bills. According to me it should be part of consultancy income only and you would be left with the option of only 50% presumptive income. (Sec.44ADA).

Hi,

According to me, dispensing medicines to the patients is a part of your business and so 8% presumptive tax will not be applicable to you.

Regards,

Nikhil

Hi

For consultancy, you can opt for presumptive taxation under 44ADA as 50% income.

However, the same cannot be opted for medicines. 44AD can be opted for this in which 8% profit is declared.

Your sale of medicines is dependent on the consultation. It is not an independent activity. If the margins are less in medicines don't avail benefit of 50%, prepare proper books of accounts, get them audited and file ITR-3

Hi,

There are two assumptions:

1) You bill your patients entirely for consultations only (medicine not charged separately):

You can claim 50% on entire billing. (This you may not like since you said that margin on medicines is less)

2) You bill your patients separately for consultation and medicines.

In this case separate 50% and 8% rule can be followed based on differentiated revenues. (This seems unlikely as you might not be doing the same)

Suggestion:

It is suggested that you do your medicine sale business entirely different from that of consultancy business, so that separate books of accounts can be maintained and separate profit margins can be calculated on this. In this way separate 44AD and 44ADA benefits can be taken or opted for.

Regards,

Hi,

It is possible to go for both the business activities separately under income tax regime and claim the benefit under both the presumptive sections. As there is no such thing mentioned under these sections where in your case can be pushed out of the law. However, the precautionary measure that you may undertake to avoid any litigation in future could be that you maintain bills/invoices for sale of medicines and bills for your consultancy services separately.

That would help you justify your case easily.

Thanks

Damini

Since you don"t run medical shop independently ,i will not suggest to go for 8% .I will suggest to file presumptive tax under 50%.

But since you mentioned the margin is less,then its advisable to go for Audit and file return accordingly.

To avoid litigation in future,it is advisable to separate consultancy with medical business,issue separate bill.

Hope it helps.