MUMBAI: The income-tax department on Thursday carried out surveys on major Hospitals in Mumbai to verify whether they were complying with the provisions of tax deducted at source (TDS) under the Income-Tax Act. Six high-end hospitals in South Mumbai and suburbs came under survey, following reports received by the department that some of these establishments were deducting only 10% of the payment given to doctors, instead of the regular rate of 30% applicable for salaried professionals.
The contention of the department is that since the terms of the appointments reveal an employee-employer relationship between the hospitals and doctors, hospitals are required to deduct tax at 30%.
Instead, the hospitals are treating the payment to doctors as professional fees for which tax payable is only 10%, under Section 194 (J) of Income-Tax Act.
A survey, under tax laws, is different from a raid. The powers under a survey is limited to examining the premises and documents, while a raid empowers the taxman to seize papers and assets from the premises of the parties.
The surveys were also prompted by reports that hospitals were not deducting TDS from the maintenance charges paid for the equipment and operation theatres. According to I-T officials, the hospitals are bound to deduct tax before paying maintenance charges.
