Sale of Medicine by a doctor
This query is : Resolved
08 May 2010
A Doctor is selling medicines in his clinic. His Consulting Fess will be around Rs7.5 Lakhs P.A and Income from Medicine Sales is Rs 22 LakhsP.A. He is also filing Sales Tax returns monthly, for sale of Medicines.
My Query is
Whether he is liable for Tax Audit U/s 44AB under Income from Profession?
My Query is
Whether he is liable for Tax Audit U/s 44AB under Income from Profession?
14 May 2010
If the Dr. sales the medicine under the same name of firm in which he provides consultancy, then the total income will be 29.5L(7.5+22) & hence he is covered u/s 44AB.
But if he sells medicine under different name of firm, then it will not b coverrd u/s 44AB as the proceeding does not exeeds Rs 40L
But if he sells medicine under different name of firm, then it will not b coverrd u/s 44AB as the proceeding does not exeeds Rs 40L
Message likes :
1 times
14 May 2010
Whether separate Income & Expenditure A/c and Profit & Loss A/c to be prepared for Consultancy Fee and Sale of Medicine,Or Consolidated Profit & Loss A/c can be prepared?
22 July 2025
Great question!
### Tax Audit under Section 44AB for a Doctor selling Medicines and providing Consultancy
**Key points:**
1. **Tax Audit Applicability (Section 44AB):**
Tax audit applies if **total turnover/gross receipts exceed Rs 40 lakhs** (for professionals, limit is Rs 50 lakhs or Rs 1 crore for business, but here considering older limits or specific cases).
2. **Income Streams:**
* Consultancy fees: Rs 7.5 lakhs
* Sale of medicines: Rs 22 lakhs
* Total combined income: Rs 29.5 lakhs
3. **Firm name & Separate Books:**
* If **both activities are under the same firm/entity**, then combined turnover is considered for audit applicability.
Here total is Rs 29.5 lakhs, which **may not cross the audit threshold** (depending on the applicable limits).
* If **medicine sales are under a different firm/entity**, then only that turnover is considered individually.
4. **Separate or Consolidated Accounts:**
* If both activities are under one entity, it’s usual and simpler to prepare a **consolidated Profit & Loss account** covering both consultancy and medicine sales.
* However, you can maintain **separate accounts internally** to track each activity’s performance, but for tax filing and audit, consolidation is common.
---
### Summary:
* If medicine sales and consultancy fees are under the same firm, total receipts = Rs 29.5 lakhs — **likely no tax audit needed** (as below Rs 40L threshold).
* If separate firms, audit depends on individual turnover per entity.
* Consolidated P\&L is fine, but internal separate accounting helps clarity.
---
**Do you want me to help draft a sample Profit & Loss format showing both activities separately for clarity?**
### Tax Audit under Section 44AB for a Doctor selling Medicines and providing Consultancy
**Key points:**
1. **Tax Audit Applicability (Section 44AB):**
Tax audit applies if **total turnover/gross receipts exceed Rs 40 lakhs** (for professionals, limit is Rs 50 lakhs or Rs 1 crore for business, but here considering older limits or specific cases).
2. **Income Streams:**
* Consultancy fees: Rs 7.5 lakhs
* Sale of medicines: Rs 22 lakhs
* Total combined income: Rs 29.5 lakhs
3. **Firm name & Separate Books:**
* If **both activities are under the same firm/entity**, then combined turnover is considered for audit applicability.
Here total is Rs 29.5 lakhs, which **may not cross the audit threshold** (depending on the applicable limits).
* If **medicine sales are under a different firm/entity**, then only that turnover is considered individually.
4. **Separate or Consolidated Accounts:**
* If both activities are under one entity, it’s usual and simpler to prepare a **consolidated Profit & Loss account** covering both consultancy and medicine sales.
* However, you can maintain **separate accounts internally** to track each activity’s performance, but for tax filing and audit, consolidation is common.
---
### Summary:
* If medicine sales and consultancy fees are under the same firm, total receipts = Rs 29.5 lakhs — **likely no tax audit needed** (as below Rs 40L threshold).
* If separate firms, audit depends on individual turnover per entity.
* Consolidated P\&L is fine, but internal separate accounting helps clarity.
---
**Do you want me to help draft a sample Profit & Loss format showing both activities separately for clarity?**
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
- Applicability of TDS on CFS, CHA fees, and shipping line charges
- Notice from IT DEPTT IF FD AMOUNT EXCEEDS 10 LACS
- Limited Liability Partnership Firm
- GST payable under RCM
- Unable to generate and save json file for updated return
- Applicablity on tds
- PRODUCT AND SERVICE CATEGORY CODE
- Tax audit & Switching from Presumptive taxation
- Section 194I not showing in TDS RPU for Compnay Assessee for TDS on rent
- LTCG offset against property buy
- Advance money given for supply of goods
- Import purchase entry
- Rule 54(1A) for Distributing ITC
- Received advance money for supply of goods but forfeited by us since full money not received
- EXCESS CREDIT REALTED GST REVERSAL
- Export invoice not reported
- CA Articleship Extension Matter
- GST OFFICER WRONG NOTICE
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Composition Dealer GST Annual Return Filing process
Trending Online Classes
-
LIVE Course on GSTR-9 & GSTR-9C (Technical | Practical | Concept - Based)
Sachin Jain03 November 2025
CAclubindia
