Format for computation of Income from Profession

In case of Doctor or Medical Practitioner

Particulars ₹ ₹
Professional Receipts:
1. Fees for conducting operation XXX
2. Consulting fees XXX
3. Visiting fees XXX
4. Sale of Medicines XXX
5. Gifts received from Patients for professional services XXX
rendered
XXX
6. Examiner’s fees
XXX
7. Nursing home receipts
XXX
8. Any other professional receipts
XXX
Total Professional Receipts XXX
Less: Professional Expenses:
1. Rent, Light, Water charges salary to staff, telephone expenses
of clinic or hospital
XXX
2. Cost of medicines are determined in two days
a. If accounts are maintained on cash basis:
Cost of actual medicines purchased during the previous year
XXX
(Or)
 b. If accounts are maintained on mercantile basis:
Opening stock (+) New purchases (-) Closing stock XXX
3. Depreciation on surgical equipment and X-ray M/C etc. at XXX
prescribed rates
XXX
4. Depreciation on books at prescribed rates
5. Motor car expenses: Depreciation relating to professional
XXX
work
XXX
6. Expenditure incurred to increase professional knowledge
XXX
7. Hospital or clinic expenses
XXX
8. Ant other expenditure incurred during the year pertaining to
profession XXX
Income from Profession XXX
Example:
Dr. Satya Prakash is a medical practitioner who maintains cash system of accounting. Compute his gross total income from the
following particulars:
Receipts and Payments A/c for the year
₹ ₹
To Balance b/d 28,000 By Rent of clinic:
To Consultation fees 2017-18 20,000
2017-18 10,000 2018-19 1,80,000
2018-19 3,60,000 By Electricity and Water 40,000
2019-20 30,000
To Visiting fees 4,25,000 By Purchase of Professional
To Loan from SBI 2,25,000 books 30,000
To Gifts and Presents 60,000 By Car purchased on 1-1-2019 5,00,000
To Honorarium from By Expenses of car 20,000
Private hospital 1,00,000 By Collection charges on
To Dividend from foreign on dividend 1,000
Company 1,10,000 By Salary to staff 1,30,000
To Interest on POSB A/c 10,000 By Life Insurance Premium 1,00,000
To Sale of medicine 2,50,000 By Municipal tax on
To Rent received 20,000 let out house 2,000
To Receipt from LIC By Interest on bank loan 25,000
policy matured 70,000 By Purchase of medicine 2,00,000
 By Purchase of surgical
equipments 1,80,000
By Personal expenses 1,56,000
By Balance b/d 1,14,000
16,98,000 16,98,000
Additional Information:
a) Allowable depreciation on car is 15% and car is used equally for personal use and professional purposes.
b) Gifts and presents include ₹ 25,000 received from patients and the remaining relatives.
c) SBI loan is taken for daughter’s marriage.
d) Outstanding salary payable to staff is ₹ 20,000.
e) Depreciation allowable on surgical equipments 15% and books 40%.