BHUBANESWAR: The Income Tax department has flagged non-payment of tax by State agencies, which had partnered with private hospitals to run Covid hospitals during 2020-21 fiscal. The State government had roped in 30 private hospitals to set up dedicated Covid hospitals in the districts during the first wave of the pandemic last year and paid nearly Rs 344.55 crore. As per provisions of Income Tax Act, 1961 and Income Tax Rules, 1962, the applicable rate of TDS should have been deducted by the officer or drawing and disbursement officer at the time of making the payment.
IT department sources said the payments were made without deduction of tax at source. “The agencies owe around `50 crore towards TDS in the last financial year. They should have deducted the TDS at the time of making payment and deposit in the Central government account within the prescribed due date,” sources informed.
The funding agencies of the State government had made various payments like fixed rental charges and for variables like consumables, drugs, PPE, patients’ diet and ambulance/mortuary services to these hospitals.
Interest at 1.5 per cent per month is chargeable for late deposit of TDS from the date of deduction till the date of deposit of such tax and interest at one pc is chargeable for non-deduction of tax at source. “In case, any hospital is exempted from tax, the agencies could have produced no-deduction certificate. But here, neither the no-deduction certificate has been applied nor produced by the funding agencies,” said an IT official.
Citing non-payment of tax, Commissioner of Income Tax (TDS) SM Keshkamat has written to Chief Secretary Suresh Chandra Mohapatra requesting him to issue necessary instructions to the officials concerned for deduction and payment of TDS at the earliest. As per norms, deduction should be made at 1.5 per cent of the amount paid for any work as per the agrement with the private hospitals and at 7.5 per cent for rent paid for use of land or building.
Keshkamat has warned that non-deduction of tax may attract penalty. “If TDS for any reason has not been paid so far, the same should be made during the current financial year and remitted to the Central government account along with the applicable interest,” he stated.