Assess maintained a private hospital .yearly gross receipts Rs.1 crore.
How to apply obtaining registration and approved producure of hospital by chief commissioner sec 17(2)(ii)(b) of I.t. act.this assess eligible or not.
As per Proviso to section 17(2)
1) Expense incurred or reimbursed by the employer for the medical treatment of the employee or his family (spouse and children, dependent – parents, brothers and sisters) in any of the following hospital is not chargeable to tax in the hands of the employee:
a) Hospital maintained by the employer.
b) Hospital maintained by the Government or Local Authority or any other hospital approved by Central Government
c) Hospital approved by the Chief Commissioner having regard to the prescribed guidelines for treatment of the prescribed diseases.
2) Medical insurance premium paid or reimbursed by the employer is not chargeable to tax.
If Private Hospital is approved by the Chief Commissioner of Income Tax, having regard to the prescribed guidelines for the purposes of medical treatment, any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family is completely exempt from income tax under Clause (ii) of the proviso to Section 17 (2) of the I.T. Act.
Procedure for getting hospital registered under sec 17(2)(ii)(b):
- Assessee should submit his application to Chief Commissioner as per registered office address of assessee.
- Since the Commissioner is not having adequate knowledge about functioning of the hospital they make a request to govt authority for arranging one qualified person (a doctor) to the visit the hospital along-with their team usually comprising of AC, Inspector and ITO. However the doctor should be from local jurisdiction under Chief Medical office – Health Dept.(CMOH)
- Upon completion of successful inspection the Doctor will forward a report to ITO mostly comprising the points covered under Rule 3A. ITO will forward a similar report to AC upon receipt of the technical conformity / non conformity and then he will send it to commissioner. In case of any deficiency, process need to re-visited upon intimation by the department to assessee.
- Once recommendation is received from Commissioner , CCIT (Exemption) will issue order for type of diseases covered (prescribed in Rule 3A) and period of exemption. Process of renewal is repetition of above.
List of various conditions to be checked before approval , are given under Rule 3A of income tax rules..which are given below:-
As per Rule-3A of Income-tax Rules
[Exemption of medical benefits from perquisite value in respect of medical treatment of prescribed diseases or ailments in hospitals approved by the Chief Commissioner.
3A. (1) [In granting approval to any hospital other than a hospital for Indian system of medicine and homoeopathic treatment for the purposes of sub-clause (b) of clause (ii) of the proviso to sub-clause (vi) of clause (2) of section 17], the Chief Commissioner shall satisfy himself that the hospital is registered with the local authority and fulfils the following requirements, namely :—
The building used for the hospital complies with the municipal bye-laws in force.
The rooms are well ventilated, lighted and are kept in clean and hygienic conditions.
At least ten iron spring beds are provided for patients.
At least one properly equipped operation theatre is provided, with minimum floor space of 180 square feet and with a separate sterilisation room.
At least one labour room is provided, with minimum floor space of 180 square feet, in case the hospital provides medical service for maternity cases.
Aseptic conditions are maintained in the operation theatre and the labour room.
A duty room is provided for the nursing staff on duty.
Adequate space for storage of medicines, food articles, equipments, etc., is provided.
The water used in the hospital or nursing home is fit for drinking.
Adequate arrangements are made for isolating septic and infectious patients.
The hospital is provided with and maintains :—
high pressure sterilizer and instrument sterilizer;
oxygen cylinders and necessary attachments for giving oxygen;
adequate surgical equipments, instruments and apparatus including intravenous apparatus;
a pathological laboratory for testing of blood, urine and stool;
electro-cardiogram monitoring system;
stand-by generator for use in case of power failure.
There is at least one qualified doctor available on duty round the clock for every twenty beds or fraction thereof.
In hospitals providing intensive care unit facilities, there are at least two qualified doctors available on duty round the clock exclusively for such intensive care unit.
One nurse is on duty round the clock for every five beds or a fraction thereof.
In hospitals providing intensive care unit facilities, there are at least four nurses provided exclusively for every four beds or fraction thereof for such intensive care unit.
The hospital maintains record of health of every patient containing information about the patient’s name, address, occupation, sex, age, date of admission, date of discharge, diagnosis of disease and treatment undertaken.
[(1A) In granting approval to any hospital for Indian system of medicine and homoeopathic treatment for the purposes of sub-clause (b) of clause (ii) of the proviso to sub-clause (vi) of clause (2) of section 17, the Chief Commissioner shall satisfy himself that the hospital fulfils the conditions specified vide Office Memorandum dated the 6th June, 2002, by the Department of Indian Systems of Medicine and Homoeopathy, Ministry of Health and Family Welfare for approval of private hospitals for Indian system of medicine and homoeopathic treatment to Central Government Health Scheme beneficiaries and Central Government employees.]
(2) For the purpose of sub-clause (b) of clause (ii) of the proviso to [sub-clause (vi) of] clause (2) of section 17, the prescribed diseases or ailments shall be the following, namely :—
acquired immunity deficiency syndrome;
disease or ailment of the heart, blood, lymph glands, bone marrow, respiratory system, central nervous system, urinary system, liver, gall bladder, digestive system, endocrine glands or the skin, requiring surgical operation;
ailment or disease of the eye, ear, nose or throat, requiring surgical operation;
fracture in any part of the skeletal system or dislocation of vertebrae requiring surgical operation or orthopaedic treatment;
gynaecological or obstetric ailment or disease requiring surgical operation, caesarean operation or laperoscopic intervention;
ailment or disease of the organs mentioned at (d), requiring medical treatment in a hospital for at least three continuous days;
gynaecological or obstetric ailment or disease requiring medical treatment in a hospital for at least three continuous days;
burn injuries requiring medical treatment in a hospital for at least three continuous days;
mental disorder – neurotic or psychotic – requiring medical treatment in a hospital for at least three continuous days;
drug addiction requiring medical treatment in a hospital for at least seven continuous days;
anaphylectic shocks including insulin shocks, drug reactions and other allergic manifestations requiring medical treatment in a hospital for at least three continuous days.
Explanation : For the purpose of this rule,—
“qualified doctor” means a person who holds a degree recognised by the Medical Council of India and is registered by the Medical Council of any State;
“nurse” means a person who holds a certificate of a recognised Nursing Council and is registered under any law for the registration of nurses;
“surgical operation” includes treatment by modern methodology such as angioplasty, dialysis, lithotropsy, laser or cryo-surgery.]
Please specified that how many units of hospital can use single income tax exemption certificate for different location. Say one unit in Kanpur and one in Lucknow and they have only one income tax exemption certificate for Kanpur premises ,Can hospital use the same income tax exemption certificate for the both Location ???