Doctors, lawyers and other professionals

Tax on fees, clinic and chamber income, and withholding on professional services. Each answer below explains one point in plain words, works through an example, and links the exact section of the law it relies on.

• Does a professional have to pay advance tax in quarterly installments on practice income?Section 147 requires quarterly advance tax from an individual whose latest assessed income, excluding salary and final-tax income, is Rs. one million or more.
• Can a professional get an exemption or reduced-rate certificate so clients deduct less tax from fees?Section 153(4) reduced rate orders apply only where tax is not minimum, and fees tax is minimum. Section 159 certificates have narrow grounds for professionals.
• If most patients or clients pay in cash, how does the law treat cash income and cash expenses?Cash fees are taxed like other fees. Section 21 disallows some cash expenses, section 174 and rule 30 require receipts, and section 111 taxes unexplained sums.
• How does a doctor or lawyer claim credit for tax deducted by several hospitals or clients?Each payer must give a section 164 certificate. Under section 168 you add the tax back into gross fees as income and claim it as a credit in the return.
• If a company or hospital client did not deduct tax from my professional fee, who is liable: me or the client?Section 161 makes a client that fails to deduct tax from a professional fee personally liable, but section 162 also lets the Commissioner recover it from you.
• What expenses can a doctor or lawyer deduct: clinic or chamber rent, staff salaries, council fees, books?Section 20 allows costs spent wholly and exclusively for the practice, section 21 blocks personal, fine and some cash costs, and section 174 requires records.
• Can a doctor claim depreciation on an ultrasound machine, dental chair or other practice equipment?Practice equipment is depreciated under section 22 at Third Schedule rates, with a 25% initial allowance under section 23 for new plant and machinery.
• How is a doctor's or lawyer's private practice income taxed in Pakistan: as salary or as business income?Section 2(10) counts a profession as a business, so private practice fees are taxed as Income from Business under section 18, as receipts less allowed expenses.
• What legal powers does FBR use to post officers at hospitals and ask for doctors' income details?Section 175C lets FBR post officers at business premises, section 176 lets the Commissioner demand information about any person, and section 99C covers doctors.
• Are doctors' consultations and tuition or coaching in Islamabad subject to ICT sales tax on services?The ICT Schedule does not list medical consultation, but it taxes beauty clinics, some laboratories, telemedicine centres and coaching other than education.
• What income tax slab rates apply to a professional's practice income in tax year 2027?Self-employed professionals use the non-salaried slab table: 0% up to Rs. 600,000, rising to 45% above Rs. 5,600,000, plus a 10% surcharge above Rs. 10 million.
• Is private tuition or academy income taxable, and how is it declared alongside a teaching salary?Tuition fees are Income from Business under sections 11 and 18, taxed with any teaching salary in one return. The 75% salary test picks the rate table.
• Is the tax deducted from my professional fees a minimum tax, or can I adjust it or get a refund?Section 153(3) makes tax deducted from fees for services minimum tax. How that affects doctors and lawyers whose actual tax is lower, and when a refund arises.
• Do doctors, lawyers and accountants registered with PMDC, a Bar Council or ICAP have to file a return even with low income?Section 114(1)(b)(ix) requires a resident registered with PMDC, PEC, a Bar Council, ICAP or ICMAP to file an income tax return, however low their income is.
• I am a salaried doctor who also runs an evening clinic. How are both incomes taxed in one return?Hospital pay is Salary and clinic profit is Income from Business. Both are added together, and the 75% salary test decides which slab table taxes the total.
• Do lawyers, accountants, architects, engineers and consultants in Islamabad charge sales tax on their services?Table-1 of the ICT Tax on Services Ordinance lists lawyers, accountants, architects, engineers and other consultants in Islamabad at fifteen percent sales tax.
• Does a clinic owner or lawyer have to deduct tax from the salaries of staff, clerks and juniors?Section 149 makes every person paying salary deduct tax, section 165 requires withholding statements, and section 21(c) disallows salary if tax is not paid.
• Is a medical or law practice taxed differently if run as a partnership firm or company?A firm is taxed as an association of persons under section 92, with a 40% top rate for professional firms barred from incorporating. Most companies pay 29%.
• Is the 25% tax rebate for full-time teachers and researchers still available, and did it cover tuition or medical teachers?Clause (3A) cut tax on a full-time teacher's salary by 25%, excluded medical teachers in private practice, and ceased to have effect after tax year 2025.
• Is a visiting or part-time consultant at a hospital an employee or an independent professional for tax?If a visiting doctor is the hospital's employee, pay is Salary with section 149 deduction. If not, fees are business income with 15% withheld under section 153.
• Does a professional have to file a wealth statement, and why must it reconcile with income?Section 116 requires resident individuals who file a return to add a wealth statement and reconciliation. Section 111 taxes wealth growth left unexplained.
• What happens if a doctor or other professional with a practice does not file a tax return?Section 114 requires the return, section 182 sets a penalty with a Rs. 50,000 minimum, and section 100BA doubles tax withheld from people off the ATL.
• Who has to deduct tax when paying a professional's fee, and does a patient or individual client have to?Only prescribed persons listed in section 153(7) deduct tax from professional fees, and not below Rs. 30,000 a year. Most patients and small clients are not.
• Why is withholding on my fees doubled when I am not on the Active Taxpayers List?Section 100BA and rule 1 of the Tenth Schedule raise withholding by 100% for people off the ATL, so 15% on professional fees becomes 30% in tax year 2027.
• What rate of withholding tax is deducted from doctors', lawyers' and accountants' fees in tax year 2027?For tax year 2027, prescribed persons deduct 15% from fees for independent professional services such as doctors, lawyers and accountants under section 153.
• Can a doctor or lawyer reduce tax with Zakat, donations or pension fund contributions?Section 60 deducts Zakat from taxable income, section 61 credits donations up to 30% of income, and section 63 credits approved pension fund contributions.