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Hospitals allowed to take cash payment above Rs 2 lakh for COVID-19 treatment

Various hospitals are asking for cash payments from Covid-19 patients while refusing to admit on an insurance basis. 

Hospitals allowed to take cash payment above Rs 2 lakh for COVID-19 treatment

The Income Tax Department has allowed all hospitals and nursing homes in India to accept cash payments over and above the previous limit of Rs 2 lakh only for COVID-19 treatments. Hospitals can take such payments till May 31.  

Hospitals, dispensaries, nursing homes, covid care centres and other medical facilities offering Covid-19 treatment are allowed to take over Rs 2 lakh cash under the new rule, which provides relaxation from April 1 to May 31. 

"The Central Government, in exercise of powers conferred by clause (iii) of Proviso to Section 269ST of the Income-tax Act, 1961, hereby specifies Hospitals, Dispensaries, Nursing Homes, Covid Care Centres or similar other medical facilities providing Covid treatment to patients for the purpose of Section 269ST of the Income-tax Act,1961 for payment received in cash during 01.04.2021 to 31.05.2021, on obtaining the PAN or AADHAAR of the patient and the payee and the relationship between the patient and the payee by such hospitals, dispensaries, nursing homes, Covid Care Centres or similar other medical facilities," Tax Department said.

According to the notice, the patient will have to submit Permanent Account Numbers (PAN) or the Aadhaar identification number to benefit from the new move. If the patient’s relative or friend is paying for the treatment, then the healthcare facility will have to take note of their relationship. 

Income Tax Act doesn’t allow an individual to transact over Rs 2 lakh in cash in a single day. Therefore, the tax department has now provided relief to Covid-19 patients, who need to pay for their medical bills that run into a few lakhs. 

Meanwhile, various hospitals are asking for cash payments from Covid-19 patients while refusing to admit on an insurance basis. Since the whole insurance settlement process takes a lot of time, it’s better to pay cash and then ask for compensation from the insurance provider in case the hospital is not providing cashless treatment. 

Allowing hospitals to take cash over 2 lakhs will therefore help many in getting quality healthcare on a timely basis, thereby more lives will be saved. 

 

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