Cash payment above the limit of Rs 2 lakh allowed for Covid treatment in hospitals, nursing homes


The income tax department on Friday allowed hospitals and nursing homes to accept cash in excess of the Rs 2 lakh limit for Covid treatment until May 31.

“The central government, in the exercise of the powers conferred by clause (iii) of the reservation in Article 269ST of the Income Tax Act 1961, hereby specifies the hospitals, dispensaries, nursing homes, Covid care centers or other similar medical establishments providing Covid treatment to patients for the purposes of Section 269ST of the Income Tax Act 1961 for a payment received in cash from 01.04 .2021 to 05.31.2021, when obtaining the PAN or AADHAAR of the patient and the beneficiary and the relationship between the patient and the beneficiary by these hospitals, dispensaries, retirement homes, Covid care centers or others similar medical establishments ”, indicates a notification of the tax service.

According to Shailesh Kumar, partner of Nangia & Co LLP, in the current situation various hospitals / care homes have demanded cash payment for the treatment of Covid-19. However, the income tax law does not allow cash payment beyond Rs 2 lakhs.

In view of the extraordinary pandemic situation, where saving lives is the most important, given the real hardship of people, the government has issued this notification allowing people to pay cash for treatment of Covid even beyond this limit.

“This easing will save people the hassle of an additional tax problem, when they have no choice but to make a cash payment to save the lives of their loved ones,” he said.


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