Library / Income-tax Act, 2025: The Professional's Master Guide

49. Case Study 2: Professional with Books of Account

Facts. Dr. Mehul, a surgeon, has gross receipts of Rs. 1.2 crore in Tax Year 2026-27, above the Rs. 75 lakh limit of the presumptive scheme. Rs. 30 lakh comes from hospitals, which deducted TDS of Rs. 3 lakh. He is in the new regime and maintains books.

Expense	Amount (Rs.)	Treatment
Clinic rent (TDS deducted and paid)	12,00,000	Allowed
Staff salaries	18,00,000	Allowed
Medical consumables	15,00,000	Allowed
Depreciation: equipment WDV Rs. 40 lakh at 15%	6,00,000	Allowed
Depreciation: computers Rs. 2 lakh at 40%	80,000	Allowed
Conferences and journals	1,00,000	Allowed
Car expenses Rs. 3 lakh, 70% business use	2,10,000	70% allowed
Interest on equipment loan	2,50,000	Allowed
Personal LIC premium debited to accounts	50,000	Not a business expense; ignored
Total allowable expenses	57,40,000

Gross receipts	1,20,00,000
Less: allowable expenses	(57,40,000)
Income from profession	62,60,000
Add: FD interest	3,00,000
Total income	65,60,000
Tax: 3,00,000 on first 24 lakh plus 30% of 41,60,000 (12,48,000)	15,48,000
Surcharge 10% (income above Rs. 50 lakh)	1,54,800
Cess 4%	68,112
Total tax	17,70,912
Less: TDS by hospitals	(3,00,000)
Tax payable through advance tax	14,70,912

Instalment	Cumulative amount (Rs.)
15 June 2026 (15%)	2,20,637
15 September 2026 (45%)	6,61,910
15 December 2026 (75%)	11,03,184
15 March 2027 (100%)	14,70,912

Compliance. Gross receipts exceed Rs. 50 lakh, so tax audit is required (Form 26 by 30 September 2027), and the return (ITR-3) is due by 31 October 2027. He must deduct TDS on clinic rent (10%, rent above Rs. 50,000 a month), and since his receipts exceed the audit threshold, he will have to deduct TDS under section 393 on payments to contractors and professionals above the thresholds (the obligation for individuals depends on receipts of the preceding year).

Practice note

At about Rs. 66 lakh of income, surcharge of 10% applies. If income were just above Rs. 50 lakh, marginal relief would reduce the surcharge. Timing of large expenses (equipment purchases before 180 days of use, for full depreciation) can make a difference.