Industry
A clinic is a business, so account for it like one
A doctor's personal tax return and a clinic's books are different things. Once you have staff, equipment and a front desk taking money, you need to see whether the clinic itself makes money.
From patient visit to the books
Bill every visit
One numbered bill for each consultation, test or procedure, in one system.
Close the front desk daily
Bills against cash counted, UPI and card. A different person should check it where possible.
Separate income types
Consultation, procedures, pharmacy, diagnostics and any lab share should sit under different heads.
Record outflows
Supplies, rent, salaries, visiting doctors' fees and equipment.
Track what is pending
Insurer and corporate tie-up dues, amounts they disallow or deduct, and refunds owed to patients.
Review by doctor or service
Which services and doctors actually cover their costs?
Why income types must be separate
Health care services by a clinical establishment are exempt from GST (Notification 12/2017-Central Tax (Rate), entry 74), but that does not make all of a clinic's receipts exempt.
- Sale of medicines or products may be treated differently
- A room other than an ICU, CCU, ICCU or NICU charged at more than ₹5,000 a day is taxed at 5% without input tax credit, since 18 July 2022
- Hair transplants and cosmetic or plastic surgery are outside the exemption, unless restorative or reconstructive
- Non-medical income, such as renting space, may be taxable
Because purchases linked to exempt services may not give credit, go through your whole mix of services with Deepak Mittal before credit is claimed.
Payments that often need checking
- Visiting doctors
- Are they employees or independent? Ask whether TDS applies, and keep agreements and monthly statements.
- Staff
- Nurses, receptionists and helpers need payroll records. PF and ESI may apply. See payroll.
- Rent and contractors
- TDS may apply above limits. Ask Deepak Mittal to review them.
- Referral payments
- Do not assume these are ordinary expenses. Medical ethics rules and tax rules may affect them, so discuss them with Deepak Mittal before you record them.
Equipment and supplies
Expensive equipment is usually an asset, not a one-time expense. Keep a register listing the item, supplier, invoice, date, cost and any loan or lease. Maintenance contracts go under running costs. Consumables and medicines need stock tracking, with attention to expiries, or your costs will be guesses.
A monthly picture for the owner
- Income by service and by doctor
- Patient visits and average bill value
- Staff cost as a share of income
- Consumables as a share of procedure income
- Pending insurance or corporate dues
- Loan and lease repayments, against cash
Whose accounts are these?
If you run the clinic alone as a proprietor, its results form part of your own return. If it is a partnership, LLP or company, it has its own compliance. Discuss it with Deepak Mittal before you change structure. For your own receipts from other hospitals, see accounting for doctors.
Keep patient data out of the accounts
Deepak Mittal needs amounts, not diagnoses. Share billing summaries without clinical details, and agree who can see patient-level data.
Questions to ask Deepak Mittal before work starts
- Have you worked with clinics or diagnostic centres?
- How will you separate exempt and taxable receipts?
- Can you report income by doctor and by service?
- How do you handle equipment loans and depreciation?
Sources checked, November 2026
- Notification 12/2017-Central Tax (Rate), consolidated (opens in a new tab), entry 74; Notification 03/2022-Central Tax (Rate) (opens in a new tab) on room charges (read at source, 10 November 2026; no change found in the September 2025 rate notifications)
Want your clinic's billing, staff and equipment records in order?
Tell us your staff count, your services, how you bill patients today, and whether you have insurer or corporate dues.
