Tax authorities were reportedly asked to keep a close watch on private hospitals and nursing homes accepting cash payment for providing Covid-19 treatment as a measure to curb black money and possible tax evasions.
Further, the Finance Ministry has asked the income-tax department to impose hefty fines on hospitals found with unaccounted cash. Such healthcare facilities could be booked under anti-money laundering laws and prosecuted, a senior government official with knowledge of the matter. Plus, officials of North Block—the headquarters of the Finance Ministry—have flagged major concerns on secret cash deals by some private hospitals rising considerably.
The financial daily cited an official aware of the matter as saying, “Several cases, where private hospitals accepted substantial amount of cash but gave receipts of a lower amount to the patients’ families, have come to our notice.’’
The Central Board of Direct Taxes (CBDT), which frames policy for the income-tax department, has reportedly received orders to find out 20 per cent of the private health centres alleged to have indulged in undisclosed cash transactions and check the extent of accounted and unaccounted money received from patients. Also, family members of Covid patients will be asked to give feedback.
More importantly, private hospitals will be required to provide details of cash received, source of the money, name of the bank where cash has been deposited and so on. If healthcare centres are found to be repeat wrongdoers and continue to flout rules, action under anti-money laundering laws can be taken and prosecution can be filed for dodging taxes.
Citing an unnamed government source, the tax department received complaints against hospitals for allegedly asking patients to pay in cash for most expenses. So that the unaccounted cash could easily be laundered.
Last week, the CBDT issued a notification allowing hospitals and nursing homes to take cash payments of Rs 2 lakh and more for the treatment of Covid-19 patients.
Hospitals will now need to divulge cash details they received, and tax sleuths can find the patients and their families.
Several instances of malpractices came to light where health centres asked patients’ families to pay in cash for admission to the intensive care unit (ICU) or for medicines that are in short supply, the publication mentioned.