A worked example for doctors
Illustrative figures for a typical mix: hospital salary, private practice / channelling, bank interest. Your own numbers will differ; use the questions above for yours.
Worked out with the TaxWise engine: 25% rent allowance, Rs 1,800,000 relief, 6–36% slabs, foreign service income capped at 15%, 10% AIT credited, dividends final at 15%. No optional reliefs claimed.
What to watch as one of the doctors
Channelling and private-practice fees are the part of a doctor's income the IRD scrutinises hardest, because nothing is withheld and the volume of small cash and card receipts makes reconstruction difficult after the fact. Keep a per-session log — date, patient count or session block, gross fee — rather than relying on a hospital's monthly summary alone; the two rarely reconcile perfectly and the difference is where audit queries start. Equipment bought for a private clinic (ultrasound, dental chairs, diagnostic kit) is claimed through capital allowances over its useful life, not expensed in the year of purchase, and the allowance continues even in a year the equipment sits mostly idle. If your private-practice income crosses the SET threshold, the first quarterly instalment is due 15 August — miscalculating it because you're still thinking in APIT terms from your salaried post is the single most common penalty trigger among newly private-practising doctors. Where a government salary and private fees run in parallel, keep them on separate schedules from day one rather than reconciling at year end; retrofitting six months of channelling slips into Schedule 2 in March is where most doctors lose the deductions they were actually entitled to.
Common questions
- How is channelling income taxed for a consultant?
- Channelling and private-practice fees are self-assessed business income. Nothing is withheld at source, so the full slab charge falls due when you file — and quarterly SET instalments apply once your liability is large enough.
- Can I combine a government hospital salary with private practice on one return?
- Yes. Employment income goes on Schedule 1 with your APIT credited back, private practice on Schedule 2 as business income. Both feed the same progressive slabs.
- What can I deduct against channelling income?
- Expenses incurred in producing that income — consulting-room rent, staff, professional indemnity, equipment capital allowances. Personal expenses do not qualify, and you need records to support what you claim.