PROFESSIONAL FEES BY PARTNER (DOCTOR IN A PARTNERSHIP FIRM i.e. Hospital)

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This discussion examines whether partners in a hospital partnership firm can receive fees for patient treatment beyond their salary or the limits set by Section 40(b) of the Income Tax Act. It specifically questions the applicability of Section 194J for fees paid to a General Physician partner and partners with different specialisations, seeking relevant case law for clarification.

Chirayu Arora

Chirayu Arora (Querist)

24 May 2021 Hospital is backed by a Partnership firm of 3 partners (Partner X - General Physician, MBBS, Partner Y - Assistant Surgeon (Not MBBS), Partner Z- Gynecologist .

Query - Hospital charges various expenses through different components for example Room rent, nursing charges etc. Similarly, hospital Invoice also includes Doctor fees which doctor charges for treating the patients, Sometimes patient is treated by partner or external doctor (which is not a partner) or both .

Query 1 - Can Partner X take these fees for treating the patients under 194 J other than Salary or limit specified under section 40 b ? If Yes/No - Kindly suggest relevant case law
Query 2 - Can Partner Y & Z take these fees for treating the patients ( as based on their experience they also treats patients for other diseases like Malaria, Jaundice etc. ) other than Salary or limit specified under section 40 b? If Yes/No - Kindly suggest relevant case law

Kindly provide suggestions with case law if possible.