Conditions that come with the government’s nod for cash payments for COVID-19 treatment pose a challenge
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Although the ceiling of ₹2 lakh cash fee has been quickly eliminated, these with out PAN or Aadhaar are prone to face hurdles, say tax attorneys.
The situations set by the authorities in permitting cash payments over ₹2 lakh for COVID-19 sufferers’ treatment may make it troublesome for individuals to crowd-fund invoice payments. Patients with out a PAN card or Aadhaar, in addition to those that prepare to pay their treatment prices via cash loans of over ₹2 lakh from a single lender can also face challenges, stated tax attorneys.
Section 269ST of the Income Tax Act, launched after demonetisation, entails a 100% penalty for receipt of all cash payments over ₹2 lakh, however was proving to be a hurdle for a number of sufferers’ households as many don’t have entry to cashless fee choices.
Following a petition filed in the Delhi High Court on Friday that sought a leisure of the related Income Tax legislation provision amidst the pandemic, the authorities late on Friday notified adjustments to allow such cash payments for COVID-19 sufferers’ treatment until May 31, supplied the healthcare supplier obtains the PAN or Aadhaar of the affected person and the “payee”
“How many people will be willing to help with cash for meeting medical bills if it requires them to share their PAN or Aadhaar, with the fear of tax department queries that could follow?” stated a senior tax lawyer. Moreover, households trying to increase a cash mortgage from a single particular person of over ₹2 lakh to fulfill medical bills, might not be in a position to take action as a associated part in the legislation prohibits such loans, he identified.
“Such large payments are usually required when a patient is becoming more critical and perhaps needs to move into an ICU from the regular ward and time is of the essence. Even digital payments through means such as NEFT sometimes take a couple of hours, but hospitals wait till these payments hit their accounts and the patients suffer,” stated a lawyer who skilled this with a colleague final week.
The hospitals or nursing properties will even be required to notice the relationship between the affected person and the “payee”, the notification stated. The Finance Ministry didn’t reply to queries on whether or not the phrase “payee”, which refers to the particular person being paid, was inadvertently inserted and could be corrected.
“It is also seen that during times like this, people borrow money from family and friends and as many people are using the prepaid payment instruments such as Google Pay, which are faster and time saving. However, many hospitals are not accepting payment on these platforms adding to the sufferings of the patients,” the petition in the High Court has identified.
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