Medical Professional Books of Account Requirements Under

Medical professionals, including doctors, dentists, and practitioners of various systems of medicine, have specific books of account requirements under the Direct Tax Code (DTC) 2025. Rule 46(6) of the Income-tax Rules, 2026 prescribes additional record-keeping obligations beyond the general requirements applicable to other professionals. This guide analyses the books of account requirements for medical professionals and provides practical compliance guidance.

The Books of Account Framework

Section 62 — Maintenance of Books of Account

Section 62(1) requires that any person carrying on specified profession or any person carrying on business or profession satisfying the prescribed conditions shall keep and maintain such books of account and other documents to enable the Assessing Officer to compute his total income under the Act.

Section 62(4) — Specified Profession

"Specified profession" includes legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology or company secretary.

Rule 46 — Maintenance of Books of Account

Rule 46 of the Income-tax Rules, 2026 prescribes the detailed requirements for maintenance of books of account. Medical professionals must maintain records sufficient for the Assessing Officer to compute total income.

Additional Requirements for Medical Professionals — Rule 46(6)

Rule 46(6) — Medical Profession Requirements

A person carrying on medical profession shall, in addition to the books of account and other documents specified in sub-rule (4), keep and maintain the following:

1. Daily Case Register in Form No. 25

A daily case register in Form No. 25
Form 25 is a prescribed daily case register required to be maintained by practitioners of any system of medicine under Rule 46(6) of the Income-tax Rules, 2026
This register must be maintained strictly in addition to the regular prescribed books of account

2. Inventory of Stock

An inventory under broad heads, as on the first and the last day of the tax year, of the stock of drugs, medicines and other consumable accessories used for the purpose of his profession

General Books of Account Requirements — Rule 46(4)

Rule 46(4) — Books of Account and Other Documents

The books of account and other documents referred to in Rule 46(2) shall be the following:

A cash book
A journal, if the accounts are maintained according to the mercantile system of accounting
A ledger
For sums equal to or exceeding two hundred and fifty rupees, copies of bills or receipts issued by him
Original bills and receipts in respect of expenditure equal to or exceeding two hundred and fifty rupees incurred by the person and issued to him
Payment vouchers prepared and signed by the person, where the expenditure incurred does not exceed two hundred and fifty rupees, and the cash book maintained by the person does not contain adequate particulars in respect of such expenditure

Place of Maintenance — Rule 46(7)

Rule 46(7) — Place of Maintenance

The books of account and other documents other than those relating to a tax year which has come to an end shall be kept and maintained at:

The place where he is carrying on the profession
Where the profession is carried on in more places than one, at the principal place of his profession
If separate books of account are maintained in respect of each place, at the respective places at which the profession is carried on

Electronic Records — Rule 46(8)

Rule 46(8) — Electronic Records

The books of account and other documents maintained in electronic mode shall:

Remain accessible in India at all times
Have back-up kept on a daily basis in servers physically located in India

Retention Period — Rule 46(9)

Rule 46(9) — Retention Period

The books of account and other documents shall be kept and maintained for a period of seven tax years from the end of the relevant tax year.

Exemption Thresholds

Rule 46(3) — Exemption

The provisions of Rule 46(2) shall not apply:

In relation to any tax year in the case of any person, if his total gross receipts in the profession do not exceed ₹1,50,000 in any one of the three years immediately preceding the tax year
Where the profession has been newly set up in the tax year, his total gross receipts in the profession for that year are not likely to exceed the said amount

Practical Compliance for Medical Professionals

1. Maintain Daily Case Register (Form 25)

Maintain a daily case register in Form No. 25
Record details of all patients, consultations, and treatments
Ensure the register is maintained daily

2. Maintain Stock Inventory

Maintain an inventory of drugs, medicines, and consumable accessories
Record the inventory as on the first and last day of the tax year
Update the inventory regularly

3. Maintain Regular Books of Account

Maintain cash book, journal, and ledger
Keep copies of bills and receipts for sums of ₹250 or more
Maintain payment vouchers for smaller expenses

4. Ensure Electronic Compliance

If maintaining electronic records, ensure accessibility in India
Maintain daily backups on servers physically located in India

5. Retain Records

Retain all books of account and documents for seven tax years
Ensure records are available for inspection

Consequences of Non-Compliance

Section 441 — Penalty

Section 441 provides that a penalty of ₹25,000 may be imposed if the person fails to:

Keep and maintain the books of account and other documents as per Section 62 or the rules made thereunder
Retain such books of account and other documents for the period specified in the rules

Other Consequences

Disallowance of deductions
Best judgment assessment
Interest and penalty

Expert Legal Guidance

Anuj Desai & Associates provides comprehensive legal advisory services on books of account compliance for medical professionals. Our direct tax experts help medical practitioners understand their obligations, set up compliant systems, and navigate the regulatory framework. We assist in compliance assessment, system setup, and representation before income-tax authorities.

Disclaimer: This article provides general information and does not constitute legal advice. For specific guidance on books of account compliance or any other direct tax matter, please consult qualified legal professionals.

Need Expert Legal Guidance?

Navigating the books of account compliance framework for medical professionals requires experienced legal counsel. At Anuj Desai & Associates, we provide comprehensive direct tax advisory services, including:

Compliance Assessment: Evaluation of books of account obligations
System Setup: Guidance on setting up compliant systems
Record Maintenance: Assistance with record maintenance
Representation: Representation before income-tax authorities

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Medical Professional Books of Account Requirements Under Rule 46(6)