Income Tax Audit Limit For a Hospital

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Jayesh S Bhoir (Querist)

23 August 2016 A doctor own a hospital and run it on proprietary basis. So my question is whether its treat as a business or profession and its Income tax audit limit applicable under Income Tax Act.

ACA Anurag

ACA Anurag (Expert)

23 August 2016 Dear Jayesh,

DOCTORS ARE COME UNDER THE SPCIFIED PROFESSIONS AS NOTIFIED BY THE INCOME TAX ACT. U MAY REFER TO SECTION 44AB. THUS EVEN IF THE PROFESSION IS CARRIED ON IN PARTNERSHIP BY DOCTORS, IT WILL BE A PROFESSION AND IF GROSS RECEIPTS OF SUCH PROFESSION EXCEEDS RS. 25 LAKHS, IT WILL BE LIABLE FOR TAX AUDIT U/S 44AB.

Kindly like if my forum has helped you

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Jayesh S Bhoir

Jayesh S Bhoir (Querist)

23 August 2016 Rs. 10 lack is quite doubtful amount.. but in a case when a Hospital Gross receipt approx 93

Jayesh S Bhoir

Jayesh S Bhoir (Querist)

23 August 2016 Thanks for prompt reply Rs. 10 lack is quite doubtful amount?.. but in a case when a Hospital Gross receipt approx 93lack but still former Chartered Accountant treat it as Business and inter of doing Income Tax Audit file ordinary returns (ignore above msg was wrongly posted

ACA Anurag

ACA Anurag (Expert)

23 August 2016 Dear Jayesh,

Bye mistake it mentioned Rs 10 lacs. Actual professional income limit is Rs 25 lacs.

For Ay 2017-18 the limit has been increased to 50 lacs.

No it should be treated as profession income as there as a decided case law for the same

Jayesh S Bhoir

Jayesh S Bhoir (Querist)

23 August 2016 Sirji .. can you please tell me the case... thanks a lot

ACA Anurag

ACA Anurag (Expert)

23 August 2016 Dear Jayesh,

Give us some time will let u know soon

Jayesh S Bhoir

Jayesh S Bhoir (Querist)

23 August 2016 OK boss... I hold patience

ACA Anurag

ACA Anurag (Expert)

23 August 2016 Dear Jayesh,

There as so many cases but all the cases have different judgment depending upon the case structure.

So kindlu provide us below detail so that we can assist u better.

How many doctors are there in the hospital, is it medical equipment used by professional doctors only, Apart from the owner of hospital is it any person who has joined the hospital on profit share basis.

We assumed that some doctors have been hired

Jayesh S Bhoir

Jayesh S Bhoir (Querist)

23 August 2016 2 doctors are there in hospital. One owner and another a salaried doctor both doctors and other staff like nurse and ward boys etc. use equipments. And no any persons appointed to being take share in profit

ACA Anurag

ACA Anurag (Expert)

23 August 2016 Dear Jayesh,

As the case which i was talking about was with respect to the doctors taking share in profit and it was a partnership firm.
As in your case its properitorship and no doctor has been hired on income share basis so its clearly a business running by a individual but u can also take exemption under section 12A of income tax act if get registered.

Earlier i respond as bye mistake a read it partnership firm .

Finally U can treat it as business income but if u not get it audited then how u show your profit as there is very chances of getting selection in scrutiny if a good percentage of profit has not been shown .

Hope your query has been solved.

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Jayesh S Bhoir

Jayesh S Bhoir (Querist)

23 August 2016 Boss Thanks A Lot

ACA Anurag

ACA Anurag (Expert)

23 August 2016 Dear Jayesh,

You are always welcome .

Kindly like if my response has helped you

God bless you

Message likes : 3 times

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