CAG Report – Private Hospitals evade Taxes On the name of Charity.

Income tax exemptions worth hundreds of crores have been given to hospitals claiming to be charitable institutes, but they may be doing little or no charity, according to a recent report of the Comptroller and Auditor General. CAG has asked for measurable parameters to assess the extent of charitable activities by hospital trusts availing tax exemptions as the public exchequer could be losing crores without any public benefit. This includes some very big names.

In Maharashtra, a study of charitable hospitals — that avail a tax exemption — found that private hospitals availed “unjustified exemptions” amounting to ₹249.66 crore involving a revenue impact of ₹77.14 crore.

On the basis of data from Charity Commissioner in Mumbai, the CAG analyzed 10 trust hospitals and found that none of them fulfilled the conditions of Bombay Public Trust Act. “Bed occupancy in eight out of 10 hospitals was less than the mandated 10% for weaker sections of society. Only 0.41-2.79% of the patients treated actually belonged to weaker sections of society as against the stipulated 10 per cent,” the report added.

The report is available on the CAG website.

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