salary or busness income confused
This query is : Resolved
03 March 2009
Respected,
my friend is a doctor and he working with some hospital,
he does not invest anly money in that hospital and he work there at partnership, when he attent anly patient the money they receive from that patient 70% is goes to my friend and 30% goes hospital, some time he got call from other hospital where he vist and receive money.
please suggest, is that income is taken as salary income or business income.
thanks in advance
Regards,
Naresh Kansal
my friend is a doctor and he working with some hospital,
he does not invest anly money in that hospital and he work there at partnership, when he attent anly patient the money they receive from that patient 70% is goes to my friend and 30% goes hospital, some time he got call from other hospital where he vist and receive money.
please suggest, is that income is taken as salary income or business income.
thanks in advance
Regards,
Naresh Kansal
03 March 2009
Its basically in nature of Professional/consultancy Charges. Exact Nature of Income from hospital will depend on the terms of agreement between them.
04 March 2009
Yes, Tarun is correct.
Message likes :
1 times
04 March 2009
there is no such agreement between them they only said 70% is yours and 30% is for us.
04 March 2009
Then it is like partnership. Incomes to be charged under PGBP.
20 March 2009
if it is partnership than can my frd claim examption for petrol expenses or any other expenses which he incure eg:- car petrol exps. to reach hospital etc.
22 July 2025
Got it! Your friend is a doctor working with hospitals, and the income he receives is split 70% to him and 30% to the hospital, but there is no formal agreement.
Is this Income Salary or Business/Professional Income?
Since your friend is working as a partner or independently and receiving a share of fees collected (70%), this income is treated as Business or Professional Income, not Salary.
Salary is income received from an employer for services rendered as an employee.
Here, since he shares the income directly and may have some control, it’s income from Profits and Gains of Business or Profession (PGBP) under the Income Tax Act.
Can he claim expenses like petrol, travel, etc.?
Yes, if this income is treated as business/professional income, your friend can claim expenses wholly and exclusively incurred for earning that income.
This includes expenses like petrol, travel to hospital, medicines, equipment, rent of clinic space, etc.
Proper bills and records should be maintained to support these expenses.
Summary:
Situation Tax Treatment Expense Claim
Partner receiving share of income Business/Professional Income Deductible against that income
Employee receiving fixed salary Salary Income No deduction except standard deductions allowed for salary income
If your friend wants to formalize the arrangement, having a written partnership or consultancy agreement helps avoid confusion.
Is this Income Salary or Business/Professional Income?
Since your friend is working as a partner or independently and receiving a share of fees collected (70%), this income is treated as Business or Professional Income, not Salary.
Salary is income received from an employer for services rendered as an employee.
Here, since he shares the income directly and may have some control, it’s income from Profits and Gains of Business or Profession (PGBP) under the Income Tax Act.
Can he claim expenses like petrol, travel, etc.?
Yes, if this income is treated as business/professional income, your friend can claim expenses wholly and exclusively incurred for earning that income.
This includes expenses like petrol, travel to hospital, medicines, equipment, rent of clinic space, etc.
Proper bills and records should be maintained to support these expenses.
Summary:
Situation Tax Treatment Expense Claim
Partner receiving share of income Business/Professional Income Deductible against that income
Employee receiving fixed salary Salary Income No deduction except standard deductions allowed for salary income
If your friend wants to formalize the arrangement, having a written partnership or consultancy agreement helps avoid confusion.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Refund Annexure-B
- Liable to deduct tds and 44ADA
- Sale of Equity shares for Purchase of Residential Property
- Nomination of Bank for refund in itr 2
- Section 56(2) of the Income tax Act 1961 , Gift to relative .
- ECO SUPPLY REPORTIONG IN GSTR-1
- Is Interest applicable for payment made through credit ledger vide DRC03 for FY 2020-21 & 2021-22
- CCFS 2026 Schemed
- Subscription paid to foreign customer
- Two seprate Invoice needed
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
