Doctors, lawyers, CAs and consultants: tax and GST for professionals

Key facts

• Presumptive tax for professionals (section 59, old 44ADA): if gross receipts are up to ₹50 lakh (₹75 lakh if cash receipts are within 5%), you can declare 50% of receipts as profit and skip detailed books and audit.
• It covers legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration, film artists, company secretaries and IT professionals.
• If you declare less than 50% and income exceeds the basic exemption, books and a tax audit are required.

Income tax: books and audit

• Clients deduct 10% TDS on professional fees above ₹50,000 a year. Claim it from Form 168.
• Advance tax: presumptive professionals can pay the whole advance tax in one instalment by 15 March.

GST for professionals

• Registration is needed above ₹20 lakh of receipts (₹10 lakh in special category states). Services to clients abroad are exports (zero-rated) if paid in foreign currency.
• Health care by doctors and hospitals (clinical establishments) is exempt. Cosmetic and plastic surgery that is not for restoring an injury or defect is taxable.
• Legal services by an advocate or a firm of advocates to a business entity with turnover above the threshold are taxed under reverse charge: the client pays the GST. Services to individuals (not for business) are exempt.
• CAs, CSs, architects and consultants charge 18% GST once registered.

Accounting tips

• Keep a separate bank account for professional receipts.
• Track work-in-progress for long assignments; bill on milestones.
• Record TDS receivable for each client so the year-end ITR matches Form 168.

Common questions

Can a doctor use the presumptive scheme for a hospital?

Section 59 is for individual professionals and partnership firms (not LLPs) with small receipts. A hospital business with large receipts and many employees usually keeps full books.

Does a lawyer need GST registration?

Usually no, because their business clients pay GST under reverse charge, and services to individuals are exempt. Registration is needed only if they make other taxable supplies above the threshold.

Can a consultant claim expenses under the presumptive scheme?

No. 50% of receipts is treated as profit after all expenses, including depreciation.

Sources

• Income-tax Act, 2025
• Notification 11/2017-Central Tax (Rate): rates for services, incl. construction and works contract (as amended)
• Central Goods and Services Tax Act, 2017 (as amended)