3. Receipts from patients/ Nursing homes and Hospitals etc. Whenever the patients/ nursing homes are meeting your expenses like traveling, food, accommodation or any other expenses incurred in the profession see that this expenditure is directly met by the party so that you need not bill and account for it.

Gifts of purely personal nature are exempt from tax. However if they are received by virtue of profession the y are treated as income as also while receiving gift vouchers.

Where ever professional income received from Hospitals and Nursing Homes is or exceeds Rs 20,000 the Hospital/ Nursing Home has to deduct TDS @ 5.5% You can apply in Form 13E for certificate to avoid TDS.

4. Expenditure deductible from your income: Expenditure incurred wholly and exclusively for profession is deductible, where as capital and or personal expenditure is not deductible. The same applies to expenses of traveling, accommodation, food etc pertaining to attending of seminars, conferences etc. Incase part of your house is used as clinic the part of expenses of your house building (rent, repairs, municipal taxes, electricity, telephone, salary, insurance etc) can be deducted from your gross receipts. In case of salary, professional charges etc paid to spouse or any relative, the payment should be reasonable. Otherwise such payment may be disallowed and clubbed to your income.

5. Deductions/ Rebates/ Investments: Investments should be well in advance to optimize tax exemption and higher returns are achieved. Invest in PPF, Mutual funds, Life Insurance, General Insurance of Vehicles, House etc. Plan for the retirement years in Pension plans.

6. Borrowings/ Repayments When ever you are borrowing from any person, if the amount is Rs 20,000 or more obtain the amount through A/C Payee cheque / DD Repayment should also be made through the same mode. While lending too the same should be adhered to.

Finally a man was charged for non payment of his Income Tax. On the witness stand he said, “As God is my judge, I do not owe this Tax”. The verdict from the judge was short, “He is not. I am. You Do”. And that’s how a Income Tax case ends generally !!

Dr. Ravi Balagani, MD Hospital Administrator