After being urged by the Delhi High Court earlier today to consider relaxing cash transaction cap of Rs 2 lakh to help COVID patients, the central government issued a gazette notification facilitating cash payments over Rs 2 lakh to hospitals for COVID treatment a short while back.
All hospitals, nursing units, dispensaries and COVID care centres will be able to accept cash over Rs 2 lakh from the patient's family. The exemption will be applicable on all transactions made between April 1 and May 31 this year.
Secton 269ST of The Income-tax Act, 1961, prohibits any cash transanction over Rs 2 lakh in a single day. The provision, introduced in 2017, also has penal provisions for violation of the concerned section.
A gazette notification from the Ministry of Finance said, "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."
It is evident from the notification that for the purpose of cash receipt over Rs 2 lakh, three conditions need to be fulfilled. PAN and Aadhaar of the patient is must. If the payment is being made by a relative of the patient, then PAN and Aadhar of the payee will be mandatory for such payments. Also, relationship of the payee with the patient has to be declared.
CA Ved Jain, former president of Institute of Chartered Accountants of India (ICAI), told Business Today, "Considering the crisis of the century, the approach should be very liberal. The circular should have given a general exemption without any condition."
"Now from where patient gets PAN, Aadhaar if it not readily available. Immediate treatment is far more important. There may be cases where not one but many relatives will be contributing for treatment of one patient. How this condition will be complied with in such a situation," Jain added.
Earlier today, the Delhi High Court heard a plea seeking relaxation to section 269 ST of the IT Act, 1961. The court asked Ministry of Finance to apprise it of the matter on Monday.