The Income Tax (IT) Act should be amended to make it mandatory for all charitable hospitals to reserve 10 per cent of the total beds for free treatment of indigent patients, if they want to seek exemption, a parliamentary panel today told the top government officials.
The members of a sub-panel of the Public Accounts Committee (PAC) told officials that another 10 per cent of the beds should be reserved for treatment of patients from the weaker section at concessional rates, a member who was present in the meeting said.
The PAC's sub-committee on taxes headed by BJP MP Nishikant Dubey has called the Revenue Secretary Hasmukh Adhia and Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra besides other officials to discuss the CAG's report on assessment of private hospitals.
Sources in the panel said that Dubey, citing the report, told officials that there is a lack of measurable definition of "charitable purpose". And in lieu of the charity, they are being run as a "commercial entity to make profits".
Therefore IT act should be amended and hospitals be governed by the rules similar to the Bombay Public Trust Act, they said.
As per the Bombay Public Trust Act, 10 per cent of the total beds should be reserved for indigent patients for free treatment and another 10 per cent for the weaker sections for treatment at concessional rates, the sources added.
The members also told the officials that since there is no measurable parameter prescribed in the Income Tax act to assess the extent of charitable activities being undertaken by hospital trusts availing of exemptions under the act, few amendments are required in it.
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