Govt lifts cash payment limit for Covid-19 treatment

The government Friday allowed cash payment beyond Rs 2 lakh in hospitals and nursing homes treating Covid-19 patients.

The finance ministry relaxed the income tax rules, which bars cash payment beyond Rs 2 lakh to any entity.

The relaxation has been given for the period between April 1 and May 31. The patient and the payee will have to submit their PAN or Aadhar card number to the hospital for such a payment.

The move came after the Delhi High Court sought Centre's response on a plea saying hospitals were delaying treatment and refusing to accept cash beyond Rs 2 lakh citing the income tax law.

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"The Central Government .... 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 April 1, 2021, to May 31, 2021, on obtaining the PAN or AADHAAR of the patient and the payee and the relationship between the patient and the payee...," the CBDT said.

Nangia & Co LLP Partner Shailesh Kumar said in the present situation, various hospitals/ nursing homes have been demanding payment in cash for Covid treatment.

"Considering the extraordinary pandemic situation, where saving life of people is most important, considering the genuine hardship of people, the Government has issued present notification allowing people to make cash payment for treatment of COVID even beyond this limit.

"The notification is applicable for all cash payments made on/ after 1st April 2021 till 31st May 2021," Kumar added.

(With PTI inputs)