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Many Charity Hospitals Claim Tax Exemptions Worth Crores While Doing Little Charity: CAG

न्यूज़ वर्ल्ड इंडिया | 0
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| August 21 , 2017 , 09:04 IST

A recent report of the Comptroller and Auditor General (CAG) has revealed that hospitals claiming to be charitable institutions have received Income tax exemptions worth hundreds of crores despite doing little or no charity. CAG has called for measurable parameters that would assess the charitable activities carried out by a specific hospital trust availing tax exemptions.

Various sections of the Income Tax (I-T) Act allow hospitals, nursing homes and medical research institutes to avail of relief and incentives, however, many institutions continue to charge patients yet still claim and receive tax exemption as they have been officially registered as 'trusts'.

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The I-T Act has no specific definition of what is 'charitable' which is part of the problem according to the CAG report, which added that many 'charitable' trusts receiving significant amounts in gross receipts were not being selected for scrutiny by the I-T department.

The CAG reported that even when measurable parameters did exist for assessing the extent of charitable activities of a Trust, the I-T department is unable to deny the exemption. For example, the Bombay Public Trusts (BPT) Act, which governs charitable trusts in Maharashtra, requires trusts to fulfil certain criterion such as setting aside 10 percent of the total beds for free treatment of the poor and 10 percent for treatment at concessional rates.

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However, in a CAG audit of 10 trust hospitals registered under this act, it was found that a majority did not fulfil the stipulated conditions. Despite flouting the norms, these hospitals continue to get tax exemption worth crores as the I-T Act does not identify non-compliance with BPT Act as grounds for denying exemption.

Another trust flouted the rules by setting up a 3-year post graduate course in a Mumbai hospital and collecting the fees for the course despite the course being declared illegal by the Medical Council of India. Despite the violations, I-T department could not deny exemption as it was legally registered as a Trust.

According to Section 80G of the I-T Act, which provides exemption to donations that charitable trusts receive, receipts issued to donors should have a reference number and date of order, but the CAG audit found that the concerned receipts were available in only 10 percent of the cases in standalone hospitals.

mk

All the Hospitals which got the cover of TRUSTS, earning lot and TRUSTEES SIPHON THE MONEY BY SEVERAL MODE i.e. as if they are the suppliers, service providers etc. IF WE CLOSELY EXAMINE THE TRUSTS, THEIR BOGUS ENTRIES AND CONCEALING OF OTHER INCOME AND WASTE WASTEFUL EXPENDITURE WILL COME TO LIGHT AND THEY ARE CHEATING THE GOVERNMENT IN THE FORM TAX. ALL THE HOSPITALS IN INDIA WITH BOARD NAME OF TRUSTS SHOULD BE THOROUGHLY EXAMINED AND VIOLATIONS OF PROCEDURE TAKEN INTO ACCOUNT AND THE TRUSTS CHAIN SHOULD BE CANCELLED.