Income Tax department inspects five hospitals in Kochi

Move follows information that doctors were paying only 10% TDS instead of the mandatory 30%

Officials of the Income Tax (IT) department inspected five prominent superspecialty hospitals in Kochi and its immediate suburbs on Thursday as part of a drive to prevent alleged evasion of tax deducted at source (TDS) by doctors.

The inspections, which will be extended to all hospitals in the district, were conducted following information that doctors were paying only 10% TDS by taking refuge in an agreement they make with hospital managements that they are professionals (whereby they get paid in proportion to the work done). On the contrary, most doctors are paid regular salary and are hence bound to pay 30% tax. In addition, the hospital concerned takes care of the expenses of amenities that doctors enjoy, unlike most other professionals who ought to pay for them from their pockets, official sources said.

It is premature to state the outcome of the inspections at the hospitals, where doctors and administrators were confronted on tax evasion, they added. Many hospital managements help aid evasion by showing that doctors are visiting medical professionals, even if they are permanently employed. Over the years, hospitals have adopted this practice to retain doctors for fear that they will join other hospitals. Sources said they would convince doctors that they ought to be treated as salaried professionals.