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A dozen private nursing homes and hospitals today lost their approval granted under Section 17(2) of the Income Tax Act on the basis of an assessment conducted by the Department of Income Tax, Chandigarh. According to Chief Commissioner (Chandigarh region) P K Chopra, this has been done after it came to the notice that hospitals and nursing homes reviewed were not employing adequate number of medical staff (doctors and nurses) required under the prescribed rule.

The Section 17 (2) of the I-T Act provides that the employees of any private employer/company get income-tax exemption on the reimbursement of their medical treatment expenses from their employer if the hospital is approved under the said Act.

This approval is given for a period of three years. The hospitals and the nursing centers at the time of the approval hire the requisite number of medical staff but get lax afterwards and do not fill the vacancies falling vacant in the subsequent period. The department for the first time made a mid-term review to catch the guilty and the reputed hospitals in town like Grewal Eye Institute, Mukat Hospital and Heart Centre, Hope Clinic and Maternity Centre, P N Urology and Surgical Hospitals Private Ltd, Omni Hospital were among those whose approval has been withdrawn. Chopra said the act did not impose any penalty or fine but it was big disgrace for the reputation of the centers who claimed to provide state-of-the-art medical facilities.

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13 Comments

  1. Rishi says:

    An Govt employee taken treatment for same ailments disease from 3 hospitals consecutively two are empaneled hospital and 3rd CBDT approved hospital but not renewed many years, is he can avail exempted for entire amount from tax u/s 17(2)

  2. R.Suryanarayanan says:

    There is no specific application for applying for approval of hospitals u/s.17(2) of the Act. The application has to be addressed to the Chief Commissioner of Income-tax of the Region in plain letter format giving details required under Rule 3A(1). This approval is granted under Sec.17(2)(viii) of provkiso (ii)(b). But in the Rule, the section is mentioned as 17(2)(vi). This needs clarification.

  3. Pushpa.G says:

    hi,

    i’m working in an hospital, and the same has to be registered under section 17(2)?
    please guide me the formalities and pre requisite for the approval

    Regards,
    Pushpa.G

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