Net-shy Covid patients feel payment pain, major worry for many in small-town India – The Economic Times

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Synopsis–Families of these Covid-19 infected persons are asking friends and relatives who use netbanking to transfer money to the hospitals and clinics to secure admission. Tax professionals in some of the smaller towns and non-metros, where hospitals are inundated with patients from interiors, have urged the government to relax the rule till the pandemic lasts.

After finding that elusive hospital bed, many unfamiliar with online banking are facing the ordeal of tax rule with most private hospitals refusing to accept cash payments of Rs 2 lakh or beyond from patients.

Families of these Covid-19 infected persons are asking friends and relatives who use netbanking to transfer money to the hospitals and clinics to secure admission. Tax professionals in some of the smaller towns and non-metros, where hospitals are inundate with patients from interiors, have urged the government to relax the rule till the pandemic lasts.

According to Section 269ST of the Income-Tax Act, a provision introduced in the budget tabled immediately after demonetisation in 2016, any receipt of Rs 2 lakh or more in cash may attract penalty of 100%. Enacted to curb cash deals, the law is now being tested under unprecedented circumstances.


“No hospital accepts a cheque for the simple reason that if it bounces, recovering the money is difficult. So, most insist on online fund transfer even before a patient is admitted. People from tier 2 and 3 cities and villages, who have withdrawn or arranged cash but are not acquainted with netbanking, are facing problems. Also, there are families where the husband is in a serious condition while the wife and other members are not in a position to carry out online transactions. Section 269ST has a clause under which the government may exempt certain categories of receipts from the penal provision. Probably, the government should come out with a notification to temporarily spare hospitals from 269ST,” said Manish Dafria, a chartered accountant from Indore, where tax professionals have jointly made a representation on the issue to the finance ministry.

In government hospitals where expenses are unlikely to cross Rs 2 lakh, patients pay cash or even use credit cards where limits may be capped at Rs 1 or 2 lakh. Even for debit cards, banks often set a transaction daily limit depending on customer profile and security considerations.

Many belonging to farming, business and trading communities in states like Punjab and Haryana are ready with cash or are willing to sign a cheque to meet the hospitalisation expenses, but the facilities are constrained either by the law or their policy. “Hospitals don’t accept cheques and we are not well-versed with online banking. A private hospital in Panipat told us that it would stop medication unless we pay upfront. The bill was more than Rs 2 lakh. So we had to call some relatives,” said 65-year old Subhash Dhawan, a city resident.

Harrowing Experience
A few days ago, Anil Sharma of Ambala ran into a similar problem. “The ceiling of Rs 2 lakh is proving to be a bane and should be scrapped, at least for the time being… People are already under a lot of stress and this is adding to the trauma,” he said.

There are similar stories from other parts of the country. “People from nearby villages and towns are being admitted to various hospitals at Raipur and Bhilai (in Chhattisgarh). In most of these cases, the bills generally exceed Rs 2 lakh. But due to Section 269ST, hospitals are not accepting payment in cash,” said Minesh Kumar Jain, a chartered accountant from Durg in Chhattisgarh.

Private hospital owners, while admitting the problem, say they can do very little. “We are trying to do whatever we can to manage in the present situation. On top of that we cannot deal with agitated relatives of patients who are facing difficulty in making payments. If the bill is more, they are telling us to accept cheques. How is this possible?” a nursing home owner in Sonepat told ET.

Officials in bank branches, functioning with fewer hands, often help customers in putting through a NEFT or RTGS transaction from their branches. “But this is not possible from another bank, in another city where relatives may have moved the patient for urgent medical attention. Also, banks are operating for a shorter duration. So, the families of these patients are approaching others. Sometimes they can, sometimes they can’t,” said Jain.

Amnesty Available
According to Ashish Vyas, a chartered accountant from Kota, while under the Rajasthan government scheme for free treatment patients need not make any payment to a hospital, clinics which are not recognised under the programme and don’t accept cash payment of Rs 2 lakh or more. “Visiting branches for NEFT/RTGS transactions can take time… people from rural areas end up panicking,” Vyas said.

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