It comes as the government has received several complaints that many hospitals have refused to accept payments in any other mode but cash. Besides, some hospitals are allegedly asking patients to make upfront cash payments even when they have health insurance policies.
“The field formations across some major cities have been asked to begin their investigations. This is just the first step and no coercive action has been taken yet,” said an income tax official, who did not wish to be identified.
Tax experts said several hospitals are escaping income tax as well as indirect taxes such as goods and services tax (GST) by accepting cash.
“The cash collected by the hospitals over the limit prescribed under the current regulations will not only contravene the statutory provisions but also possibly escape assessment. Further, a few medical services are subject to GST and cash collected for those supplies may escape indirect tax payment as well,” said Abhishek A Rastogi, partner at Khaitan & Co, a law firm.