The Income Tax Department on Friday allowed hospitals and nursing homes to accept cash over and above the limit of Rs 2 lakh for Covid treatment till May 31.

"The Central Government, in exercise of powers conferred by clause (iii) of Proviso to Section 269ST of the Income-tax Act, 1961, hereby specifies Hospitals, Dispensaries, Nursing Homes, Covid Care Centres or similar other medical facilities providing Covid treatment to patients for the purpose of Section 269ST of the Income-tax Act,1961 for payment received in cash during 01.04.2021 to 31.05.2021, on obtaining the PAN or AADHAAR of the patient and the payee and the relationship between the patient and the payee by such hospitals,dispensaries, nursing homes, Covid Care Centres or similar other medical facilities," a notification by the tax department said.

According to Shailesh Kumar, Partner with Nangia & Co LLP, in the present situation, various hospitals/ nursing homes have been demanding payment in cash for treatment of Covid-19. However, income tax law does not permit cash payment beyond Rs 2 lakhs.

Considering the extraordinary pandemic situation, where saving lives is most important, considering the genuine hardship of people, the Government has issued the present notification allowing people to make cash payment for treatment of Covid even beyond this limit.

"This relaxation will save people the hassle of an additional tax problem, when they have no option but to make a cash payment to save the life of their near and dear ones," he said.