Ludhiana: Tax scrutiny of hospitals reveal TDS,TCS violations

Ludhiana: A recent survey carried out by the Income Tax Department has revealed glaring discrepancies of income tax returns by big city hospitals. Evading the actual amount of tax levied on them, many hospitals have been found guilty of  failing to comply with the TDS (tax deducted at source )and TCS (tax collected at source) norms.

With instructions from the  joint commissioner of income tax department, Dr Tarundeep Kaur, the hospitals had their accounts examined by deputy commissioner  Dr Gagan Kundra, bringing the cash bills and other accounts of the hospitals under scrutiny.

"The most common ways of defaulting or evading tax by the hospitals include showing their permanently employed doctors on whose salaries 30% TDS needs to be deducted as visiting professionals in their accounting records, as only 10% TDS is chargeable on services rendered by the visiting professionals. Besides this other aspect is treating the annual maintenance contract (AMC) of the technical equipment of hospital as simple contract and paying 2% TDS whereas 10% TDS should be paid on it." Dr Gagan Kundra, Deputy commissioner of income tax (TDS) told the TOI.

Kundra also added, "Many hospitals are still not complying to the TCS norms which came into effect from June 1 this year and under which on any cash payment received in excess of Rs 2 lakh the hospital needs to charge 1 percent TCS and deposit it to the department."

Having strictly warned the hospital management against employing methods to conceal their actual tax liability on earlier accounts, through various seminars etc, the I-T department is not  too happy with the non-compliance  exhibited by the hospitals and has decided to come down strictly on them. The relevant documents have been taken into custody for further investigation by the department, with the details of the degree of evasion post the survey yet to be revealed by the department.