How stipends, salaries, consulting fees and practice income are taxed, explained plainly with sources and the year they apply to. Always checked against current rules; never advice.
What this topic answers
The questions we are working through, in your words.
- How is each kind of income taxed?
- Which tax regime suits which situation?
- What changes when I start consulting or practising?
- When do I need a chartered accountant?
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Terms to know
From the money glossary.
- Tax regime
- In India, individuals have been able to choose between tax regimes that trade lower rates against fewer deductions. Which suits you depends on your own deductions, and the rules are revised, so check the current law each year.
- TDS
- Tax deducted at source: tax withheld by whoever pays you, such as an employer or a hospital paying consultation fees, and credited against your final tax bill.
- Advance tax
- Income tax paid in instalments during the year rather than all at the end. It matters for doctors with consulting or practice income where not enough tax is deducted at source.
- Professional income
- Income from practising a profession, such as private consultations, taxed differently from salary. Indian law includes a simplified option for eligible professionals; its conditions change, so check them with a chartered accountant.
- Capital gains
- Profit from selling an investment for more than you paid. How it is taxed depends on the asset and how long you held it, and those rules have changed several times.
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Can my expertise earn beyond my hours, and should it?
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