Medical professionals are subject to specific bookkeeping requirements under the Income Tax Act, 2025. In addition to the general books of account required for specified professions, Rule 46(6) mandates additional records for medical professionals. Understanding these requirements is essential for doctors, dentists, and other medical practitioners.
The Regulatory Framework
Section 62: General Requirements
Section 62 requires persons carrying on specified professions to maintain books of account. Medical profession is a specified profession.
Rule 46(6): Additional Requirements
Rule 46(6) of the Income Tax Rules, 2026 mandates additional books of account specifically for medical professionals.
Additional Books of Account
Daily Case Register
A medical professional must maintain a daily case register in the prescribed form.
Purpose: To record details of patients treated
Content: The daily case register should contain:
- Date of consultation
- Patient's name and address
- Diagnosis
- Treatment provided
- Fees charged
- Any other relevant details
Maintenance: The register must be maintained daily and kept up to date.
Inventory of Drugs, Medicines, and Consumable Accessories
A medical professional must maintain an inventory under broad heads, as on the first and the last day of the tax year, of the stock of:
- Drugs
- Medicines
- Other consumable accessories used for the purpose of his profession
Purpose: To track the movement of drugs, medicines, and consumables
Content: The inventory should include:
- Opening stock
- Purchases during the year
- Consumption during the year
- Closing stock
Valuation: The inventory should be valued at cost or market value, whichever is lower.
Books of Account Exemption
The additional books of account requirements under Rule 46(6) apply only if the medical professional's total gross receipts exceed Rs. 1,50,000 in any one of the three years immediately preceding the tax year. If the gross receipts are below this threshold, the books of account requirements do not apply.
Consequences of Non-Compliance
Penalty
Failure to maintain the prescribed books of account may attract penalty under the Act.
Disallowance of Expenditure
In the absence of proper books, the Assessing Officer may disallow expenditure claimed by the medical professional.
Best Judgment Assessment
In the absence of proper books, the Assessing Officer may make a best judgment assessment of income.
Practical Considerations
Digital Record Keeping
Medical professionals may maintain books of account in electronic form, provided:
- The records are accessible in India at all times
- Backup is kept on a daily basis in servers physically located in India
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.
Audit Requirements
If the medical professional's gross receipts exceed the threshold for tax audit under Section 63, the books of account must be audited by an accountant.
Expert Legal Guidance
Understanding the additional books of account requirements for medical professionals is essential for tax compliance. Anuj Desai & Associates provides expert advisory services on Direct Tax Code compliance, helping medical professionals maintain proper books of account and avoid penalties.