Income u/s 194J by a doctor.

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  1. B A KUMAR

    B A KUMAR New Member

    A doctor is earning income under section 194J and Tds is deducted by the hospital. And the same reflects in 26AS. Financial year 2015_16 will be first year for filing income tax return for the said doctor and income is below rs 5 lakh. He earns salary income too from a different hospital for three months only. My question is :
    1. Under which head of tax computation shall this income be taxed?
    2. Which ITR has to be filled?
    3. In case the same is taxed under PGBP, then which expenses are deductible from that income to arrive at a taxable income??
    4. The doctor is staying in a rental house paying 10000pm as house rent in cheque. What will be the treatment for this house rent? Will he get any deduction for this?? If yes then under which section?
    5. Only investment is PF deposited during the year.
    6. Assets like laptop, geysers, Ac, etc purchased during the year. Will there be any deduction for these?? PlZ help
    swathy reddy likes this.
  2. ZED

    ZED Well-Known Member

    2+ Heads
    Profit and Gains from business or Profession
    Income from other sources (assessee must be having income from other sources like bank interest)


    I will advice to not to claim any deductions for expense or depreciation, and rather opt for S.44ADA ,wherein 50% of the total receipts would be deemed to be income (it would be deemed that all the deduction have been allowed)

    This appears to be most beneficial , unless the depreciation on the equipment is humongous and yet income is low.

    Deduction may be claimed u/s 80GG

    80GG. In computing the total income of an assessee, not being an assessee having any income falling within clause (13A) of section 10, there shall be deducted any expenditure incurred by him in excess of ten per cent of his total income towards payment of rent (by whatever name called) in respect of any furnished or unfurnished accommodation occupied by him for the purposes of his own residence, to the extent to which such excess expenditure does not exceed five thousand rupees per month or twenty-five per cent of his total income for the year, whichever is less, and subject to such other conditions or limitations as may be prescribed, having regard to the area or place in which such accommodation is situated and other relevant considerations :

    Provided that nothing in this section shall apply to an assessee in any case where any residential accommodation is—

    (i) owned by the assessee or by his spouse or minor child or, where such assessee is a member of a Hindu undivided family, by such family at the place where he ordinarily resides or performs duties of his office or employment or carries on his business or profession; or

    (ii) owned by the assessee at any other place, being accommodation in the occupation of the assessee, the value of which is to be determined under clause (a) of sub-section (2) or, as the case may be, clause (a) of sub-section (4) of section 23.

    Explanation.—In this section, the expressions "ten per cent of his total income" and "twenty-five per cent of his total income" shall mean ten per cent or twenty-five per cent, as the case may be, of the assessee's total income before allowing deduction for any expenditure under this section.

    Claim it under Section 80C

    Depreciation is available but opt S.44ADA, that would be more beneficial.
  3. B A KUMAR

    B A KUMAR New Member

    Thank you so much for the above explanations, plZ elaborate sec i have to maintain books of accounts?
    swathy reddy likes this.
  4. B A KUMAR

    B A KUMAR New Member

    Src 44ADA is applicable from 1/4/2017 and i need to file return for fy 2015/16
  5. ZED

    ZED Well-Known Member

    Yes, S.44ADA is applicable from F.Y 16-17
    Ok, its for F.Y. 15-16 then S.44ADA will not be applicable and normal provisions will be applicable in this case.

    Yes, it is mandatory for the assessee to maintain PROPER books of Accounts.[S.44AA(1)] + the rules have also prescribed the documents to be maintained [Refer Rule 6F of the Income Tax rules]

    The ITR-4 can be quite complex and in this case book keeping is mandatory. The assessee also has fixed assets on which depreciation u/s 32 will also needed to be computed.
    You have asked as to whether you will have to maintain the books of accounts, therefore I am of the view that proper books of accounts have not been maintained.

    I can only assist you in doing that but I think it will be more appropriate for you to get all this task done by someone in your locality. They can do but I will only be able to advise and you will have to do it all.

    If you have any other query then you may ask.
    B A KUMAR likes this.
  6. B A KUMAR

    B A KUMAR New Member

    Actually there is nothing much to maintain, the said doctor is not doing private practice. He is just engaged in a hospital and getting salary now. Like i already mentioned for the first nine months he received professional pay from the hospital under section 194J and for the last three months he received salary under section 192. In his case his designation in the hospital doesn't change, he has just changed his job. Now tell me exact accounting for this.
  7. B A KUMAR

    B A KUMAR New Member

    Electricity , mobile top up, new gas connection, monthly gas cylinder payments, payment for monthly tv recharges, depreciation on ac, tv, gyser, printer fridge,.. Will all these expenses be deductible.??? What will be the treatment for purchase of a new two wheeler or four wheeler?? What about the transportation expense relating to shifting a job to a new city.??
  8. B A KUMAR

    B A KUMAR New Member

    Rent paid rs 10000 in cheque is only for last three months when salary is earned, how shall it be treated?? If 80GG then how much deduction is allowed under that section
  9. ZED

    ZED Well-Known Member

    @B A KUMAR Ji,

    It appears that the depreciation on the above asset should not be claim because they have not been solely used for the purpose of profession.
    Further a small amount of depreciation can be claimed but it will come with more trouble and hence we should consider that these assets have been used for personal purposes. Further now the assessee is earning income from salary from which no deduction is available on account of depreciation . Hence my advice to you is to consider all the above fixed assets , as mentioned by you, as assets for personal use and do not account them under books of accounts maintained for profession.

    Even the other expenses as illustrated by you are not eligible for deduction because deduction is available only if the expense has been incurred solely for the purpose of business or profession.
    B A KUMAR likes this.
  10. ZED

    ZED Well-Known Member

    Is the employee getting HRA?

    If the employee would be receiving HRA, then exemption will have to be claimed u/s 10(13A) and deduction u/s 80GG shall not be admissible.
    B A KUMAR likes this.
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