Home / News / India /  Hospitals can accept cash payment of 2 lakh and above

New Delhi: The Income Tax department has allowed hospitals and healthcare facilities providing covid-19 treatment to accept payment of 2 lakh and above in cash.

An official notification late on Friday relaxed a rule that barred payments of 2 lakh and more in cash, in view of the hardships caused by the second wave of the pandemic.

The relief is applicable to hospitals, dispensaries, nursing homes, covid care centres and similar other medical facilities offering treatment to coronavirus infections, said the notification. This relaxation is applicable to payments received between 1 April and 31 May.

However, there is one rider. To make cash payments, hospitals have to get the Permanent Account Numbers (PAN) or the Aadhaar identification number of the patient. In case the payment is made by a person other than the patient, then these details about that person and the relationship between the two have to be collected by the healthcare facility.

The rule comes as a relief but experts pointed out that it should have come without such riders as asking for the PAN or Aadhaar may discourage persons who are otherwise willing to help. Also, at times, more than one relative or well wisher may come together to help a patient. Considering the crisis of the century, the approach should be very liberal, said a chartered accountant.

Income Tax Act prohibits receipt of 2 lakh and above in aggregate from a person in a day or in respect of a transaction or transactions relating to one event or occasion from a person. This rule also allows the government to grant exemptions. The relief granted to hospitals in the mode of accepting payment has been notified under this provision.

Gireesh Chandra Prasad
Gireesh has over 22 years of experience in business journalism covering diverse aspects of the economy, including finance, taxation, energy, aviation, corporate and bankruptcy laws, accounting and auditing.
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