Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Solo practice: proprietor + 44ADA
For most individual doctors, the simplest and often most tax-efficient setup is a proprietorship using 44ADA — declare 50% of receipts, no books, no audit, up to the ₹50/75 lakh limit. With low actual costs, this also genuinely saves tax.
Scaling up or partnering
Beyond the presumptive limit, or where doctors practise together or own a clinic with significant equipment and staff, a partnership/LLP (deducting partner remuneration) or a company (flat ~25%, useful if profits are retained) can be better. A clinic with heavy equipment depreciation may prefer normal computation over presumptive. Model the options on your numbers.
A worked example
Example: a solo consultant with ₹45 lakh receipts stays a proprietor on 44ADA. Three doctors opening a shared clinic with ₹1 crore receipts and big equipment costs form an LLP, claiming actual expenses and depreciation. A diagnostics business retaining profits to reinvest might use a company. Family rental or investment income can sit in an HUF. Our team can design the right structure.