Salaried or professional

This query is : Resolved

CA Birju Ruchir Desai (Querist)
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11 January 2012 One of my my client is a Practising Doctor. He is assisted by 1 doc of his field. The assistant conducts surgery, operations and everything and incurs few expenses on medical consumables which is a major expense. The rest goodwill,infrastructure facilities and equipments belong to my client. Advise me as to whether it would be benificial for my client to treat the assisting doc on salaried basis or as a professional(visiting doc). The payment is made on percentage basis from gross receipts till now.It can be changed both the parties are ready for either option.Please explain me in detail the pros and cons in both the situation for both the parties as the assisting doc is also my prospective client.What if i have to think for my present client? Thanx in advance.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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15 January 2012 The expenditure incurred by the visiting doctor is incidental to the profession and such can be shown in the books of your client.
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You may consider the following facts-
1. No of Operations in a month.
2. Estimated gross receipts.
3. Average monthly payout to the visiting Dr.
4. Any seasonal or cyclical variance in the no of patients. Apply 192 for TDS.
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In a situation where consistency is observed, you may pay salary , and finally incentive to adjust any +..-.
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Otherwise, treat the payment made made to him as payment towards Professional Services. Apply 194J for TDS.
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TDS provision applicable in the subsequent FY of Tax Audit.
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