Conditions that come with the government’s nod for cash payments for COVID-19 treatment pose a challenge

Although the ceiling of ₹2 lakh cash payment has been temporarily removed, those without PAN or Aadhaar are likely to face hurdles, say tax lawyers.

The conditions set by the government in allowing cash payments over ₹2 lakh for COVID-19 patients’ treatment could make it difficult for people to crowd-fund bill payments. Patients without a PAN card or Aadhaar, as well as those who arrange to pay their treatment costs through cash loans of over ₹2 lakh from a single lender may also face challenges, said tax lawyers. Section 269ST of the Income Tax Act, introduced after demonetisation, entails a 100% penalty for receipt of all cash payments over ₹2 lakh, but was proving to be a hurdle for several patients’ families as many don’t have access to cashless payment options. Following a petition filed in the Delhi High Court on Friday that sought a relaxation of the relevant Income Tax law provision amidst the pandemic, the government late on Friday notified changes to permit such cash payments for COVID-19 patients’ treatment till May 31, provided the healthcare provider obtains the PAN or Aadhaar of the patient and the “payee”