Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: cpt :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARD :: ACCOUNTING STANDARDS :: TDS :: VAT Audit :: Central Excise rule to resale the machines to a new company :: list of goods taxed at 4% :: due date for vat payment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: form 3cd :: VAT RATES :: empanelment :: articles on VAT and GST in India :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes
 
 
Latest Circulars »
 Opening of all Agency Banks for government business on April 1, 2017 – Revised instructions
 All payment systems to remain closed on April 1, 2017
 Clarification on Income Computation and Disclosure Standard (ICDS) notified under section 145(2) of the Income-tax Act, 1961
 RBI-Calendar for Auction of Government of India Treasury Bills
 Issuance Calendar for Marketable Dated Securities for April-September 2017
 Formation of seven new districts in the State of Manipur - Assignment of Lead Bank Responsibility
 Availability of LAF and MSF windows on March 28, 2017 (RTGS Working Mumbai Holiday)
  Payment systems to remain open on all days from March 25, 2017 to April 1, 2017
 Availability of LAF and MSF windows on March 25 and 26, 2017 (Saturday & Sunday)
 RBI Working Paper Series No. 5/2017: Comparison of Consumer and Wholesale Prices Indices in India: An Analysis of Properties and Sources of Divergence
 All Agency Banks and select offices of RBI to remain open on all days from March 25, 2017 to April 1, 2017

Income tax Circular No. 8/2009
November, 27th 2009

Applicability of provisions under Section 194J of Income Tax Act'61 in the case of transactions by the Third Party Administrators (TPAs) with Hospitals etc.

Circular No. 8/2009, dated 24-11-2009

A number of representations have been received from various stakeholders regarding applicability of provisions under Section 194J of Income Tax Act'61 on payments made by Third Party Administrators (TPAs) to hospitals on behalf of insurance companies for settling medical/insurance claims etc with the hospitals.

2. The matter was examined by the Board. As per provisions of section 194J (1) 'Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of-

(a) fees for professional services, or

(b) fees for technical services, [or] 1

(c) royalty, or

(d) any sum referred to in clause (va) of section 28,]

shall, at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a. cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to ten per cent of such sum as income-tax on income comprised therein...". Further as per Explanation (a) to 194J "professional services " means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession etc..'.

3. The services rendered by hospitals to various patients arc primarily medical services and, therefore, provisions of 194J are applicable on payments made by TPAs to hospitals"1etc. Further for invoking provisions of 194J, there is no stipulation that the professional services have to be necessarily rendered to the person who makes payment to hospital. Therefore TPAs who are making payment on behalf of insurance companies to hospitals for settlement of medical/insurance claims etc under various schemes including Cashless schemes are liable to deduct tax at source under section 194J on all such payments to hospitals etc.

3.1. In view of above, all such past transactions between TPAs and hospitals fall within provisions of Section 194J and consequence of failure to deduct tax or after deducting tax failure to pay on all such transactions would make the deductor (TPAs) deemed to be an assessee in default in respect of such tax and also liable for charging of interest under Section 201 (1A) and penalty under Section 271C.

4. Considering the facts and circumstances of the class of cases of TPAs and insurance companies, the Board has decided that no proceedings u/s 201 may be initiated after the expiry of six years from the end of financial year in which such payment have been made without deducting tax at source etc by the TPAs. The Board is also of the view that tax demand arising out of Section 201(1) in situations arising above, may not be enforced if the deductor(TPA) satisfies the officer in charge of TDS that the relevant taxes have been paid by the deductee assessee (hospitals etc.). A certificate from the auditor of the deductee assessee stating that the tax and interest due from deductee assessee has been paid for the assessment year concerned would be sufficient compliance for the above purpose. However, this will not alter the liability to charge interest under Section 201 (1 A) of the Income Tax Act till payment of taxes by the deductee assessee or liability for penalty under Section 271C of the Income Tax Act as the case may be.

5. The contents of the circular may be brought to the notice of officers and officials working under you for strict compliance.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - We Bring IT. Offshore software outsourcing company. We use Global Delivery Model (GDM) and believe in Follow The Sun principle

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions