Nagpur Hospital Survey Uncovers Rs 2.5 Crore in Cash Receipts, Violating Tax Rules
The Income Tax Department has intensified its scrutiny of medical establishments, conducting a survey on a multispeciality hospital in Nagpur that revealed cash receipts totaling Rs 2.5 crore from approximately 100 transactions. This action is part of a broader crackdown on cash-based dealings in the healthcare sector, which has now brought two hospitals under the scanner within a week.
Survey Details and Findings
Executed by the department's Intelligence and Criminal Investigation (ICI) wing on Tuesday, the survey targeted the Nagpur-based hospital, following a similar operation on an orthopaedic hospital the previous week. Sources indicate that the combined cash receipts from both establishments exceed Rs 3 crore, highlighting significant non-compliance with tax regulations.
Income tax laws strictly prohibit the acceptance of cash amounts of Rs 2 lakh or more in a single transaction. Violations can result in a penalty double the amount received. For hospitals, a single transaction is defined as encompassing an entire medical procedure—from admission to discharge. For instance, if a patient undergoes surgery and pays over Rs 2 lakh in cash throughout the process, it constitutes a breach of these rules.
Implications for the Healthcare Sector
The healthcare industry often sees a high volume of cash transactions, partly due to patients who may not have taxable income. However, hospitals are bound by stringent provisions that require them to report such cash receipts in tax returns and file statements of financial transactions. While exceptions may be considered in cases of medical emergencies, widespread acceptance of cash can lead to severe penalties and legal action.
Key points from the survey:
- Cash receipts of Rs 2.5 crore were identified from around 100 transactions at the Nagpur hospital.
- The total findings from both hospitals surveyed surpass Rs 3 crore, indicating a pattern of non-compliance.
- Penalties for violations can be as high as double the cash amount received, emphasizing the financial risks for medical establishments.
This development underscores the Income Tax Department's commitment to enforcing transparency and accountability in financial dealings within the health sector. Hospitals are urged to adhere to cash transaction limits and ensure proper documentation to avoid punitive measures.
