Income Tax for Doctors in 2026: 50% Presumptive Tax up to Rs 75 Lakh, TDS from Hospitals, Pharma Gifts and Equipment Depreciation

Income tax for doctors in 2026 can be paid on just 50% of fees under the presumptive scheme, if total receipts stay within Rs 75 lakh.

Dr Mehta is a paediatrician in Junagadh. She consults at her own clinic in the mornings and at two private hospitals in the evenings, which deduct 10% TDS from her fees. A pharma company sponsored her conference trip to Goa, and she bought a new ventilator for the clinic. Her receipts for the year will be about Rs 68 lakh, and she has never been sure whether she needs full books, an audit, or something simpler.

Doctors are among the most heavily tracked taxpayers, because hospitals, labs and pharma companies all report what they pay them. The rules are favourable if you use them well. Here is how they work in 2026.

In short: A doctor in private practice can use the presumptive scheme and declare 50% of gross receipts as income, with no detailed books or audit, if receipts are up to Rs 50 lakh, or up to Rs 75 lakh when cash receipts are within 5% of the total. Advance tax under the scheme is paid in one instalment by 15 March. Hospitals deduct 10% TDS on consultancy fees, which you claim in your return. Gifts, sponsored trips and other benefits from pharma companies are taxable in your hands, and the company deducts TDS on them. Doctors with higher receipts keep full accounts, claim actual expenses such as staff, rent and depreciation, and get a tax audit. Healthcare services by doctors are exempt from GST.

Our team handles income tax, advance tax and accounts for doctors, clinics and hospitals. The details are at the end of this guide.

The 50% presumptive scheme for doctors

• Who can use it: doctors and other professionals in individual practice or a partnership firm, other than an LLP.
• The limit: gross receipts up to Rs 50 lakh, or up to Rs 75 lakh if cash receipts are not more than 5% of the total.
• Income: 50% of gross receipts, or more if you choose. All expenses, including depreciation, are treated as covered.
• No audit: as long as you declare at least 50%. Declaring less, with income above the basic exemption, needs books and an audit.
• An example: on receipts of Rs 68 lakh, mostly by bank and UPI, income is Rs 34 lakh. See our guide to presumptive taxation.

When full accounts are better

• High expenses: if staff salaries, clinic rent, consumables, equipment and loan interest take more than half your receipts, actual accounts give a lower income.
• Above the limit: receipts above Rs 50 lakh, or Rs 75 lakh with low cash, mean regular books and a tax audit.
• Equipment: life-saving medical equipment has been eligible for a higher depreciation rate than general plant, which helps when you buy ventilators, monitors or similar machines.
• Clinic rent and salaries: once you keep regular accounts, check whether TDS applies to rent and to payments to visiting consultants. See TDS on rent.

TDS from hospitals and labs

• Consultants: a hospital paying you consultancy fees deducts 10% TDS. It shows in your Form 26AS and AIS, and you claim it in your return. See AIS vs Form 26AS.
• Employee or consultant: if the hospital treats you as an employee, TDS is on salary instead, and the expense rules change. See employee or consultant.
• Match every receipt: the department compares hospital TDS records with your return, so all fees must be included.

Pharma gifts and sponsored trips

• Taxable for you: gifts, sponsored travel, conference hospitality and free samples given for personal benefit are income in your hands.
• TDS by the company: the company giving them deducts 10% TDS once the value crosses Rs 20,000 in a year. See our guide on TDS on gifts and benefits.
• Report it: include the value in your return, along with the TDS credit, to avoid a mismatch notice.

Advance tax for doctors

• Presumptive scheme: the whole advance tax can be paid in one instalment by 15 March.
• Regular accounts: four instalments, by 15 June, 15 September, 15 December and 15 March. See advance tax due dates.
• Interest: missing an instalment costs 1% a month on the shortfall.

GST

Healthcare services by doctors and clinical establishments are exempt from GST. Some services, such as cosmetic procedures, and room rent above set limits in hospitals, can be taxable. See our guide to GST for doctors, clinics and hospitals.

Back to Dr Mehta. With receipts of Rs 68 lakh and cash under 5%, she stays within the presumptive scheme and declares Rs 34 lakh, with no audit. The 10% TDS from both hospitals is credited in her return, and the value of the sponsored trip goes into her income along with the company's TDS. She pays her advance tax by 15 March. If she expands into a nursing home with staff and larger equipment, full accounts would likely show a lower taxable income, and we would compare the two before she decides.

How we help

• Compare the presumptive scheme with full accounts for your practice
• Income tax returns, advance tax and TDS reconciliation
• Accounts, depreciation and tax audit for larger practices and hospitals
• Reporting of pharma benefits and replies to mismatch notices
• Structuring a clinic or nursing home as a firm, LLP or company
• GST checks for cosmetic and non-exempt services

Gadhia Associate has been in practice since 2007 and has handled work for over 7,000 clients, with a 5.0 Google rating from more than 100 reviews. Doctors and hospitals from Junagadh, Rajkot, Jamnagar, Porbandar and Veraval come to our Junagadh office, where same-day appointments are available, and returns for doctors elsewhere are handled online.

Not sure if the 50% scheme or full accounts saves you more? Let us compare both for your practice. Call or WhatsApp +91 82005 28355, or message us on WhatsApp. The first consultation is free.

Frequently asked questions

Can doctors use presumptive taxation?

Yes. Doctors in individual practice or a firm can declare 50% of gross receipts as income, if receipts are up to Rs 50 lakh, or Rs 75 lakh when cash receipts are within 5%.

Is a tax audit required for doctors?

Only if receipts cross the limit, or if you declare less than 50% under the presumptive scheme with income above the basic exemption.

What is the TDS rate on fees paid to doctors by hospitals?

10% on consultancy fees, which the doctor claims in the return.

Are gifts from pharma companies taxable for doctors?

Yes. They are income in the doctor's hands, and the company deducts TDS once the value crosses Rs 20,000 in a year.

When do doctors pay advance tax?

In one instalment by 15 March under the presumptive scheme, or in four instalments with regular accounts.

Is GST applicable on doctors' fees?

No, healthcare services by doctors are exempt, though some cosmetic and non-medical services can be taxable.

Position as of 20 October 2026. The presumptive scheme, TDS and depreciation rules described here continue under the Income-tax Act, 2025, with new section numbers. Your best option depends on your receipts and expenses, so take advice on your own practice.