(a) whether the Government provides concessions in taxation to some medical
institutes;
(b) if so, the details thereof;
(c) whether the Ministry considers to exclude service tax on medical profession;
(d) if so, the details thereof;
(e) whether there are variations in the rates of taxation on medical profession in
states; and
(f) if so, the details thereof State-wise?
MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI S.S. PALANIMANICKAM)
(a): Yes, sir.
(b): The following concessions are available under the Income-tax Act, 1961 in
respect of medical institutes:-
1. Section 10(21): Any income of a scientific research association approved under
section 35(1)
(ii) of the Act is exempt, subject to the fulfillment of conditions specified
in the section which, inter alia, include application or accumulation of its income for
purposes of scientific research, and investment or deposit of its funds in specified
modes.
2. Section 10(23C): Exemption is available to any income of
any hospital or other medical institution existing solely for
philanthropic purposes and not for purposes of profit -
(i) which is wholly or substantially funded by the Government;
or
(ii) where the aggregate annual receipts of such hospital or
institution does not exceed Rs. 1 crore; or
(iii) where the aggregate annual receipts of such hospital or
institution exceeds Rs. 1 crore and which may be approved by
the Chief Commissioner or Director General.
In respect of hospital or other medical institution referred to
in item
(iii) above, this exemption is subject to the fulfillment
of certain specified conditions which, inter alia, include
application or accumulation of its income in the specified
manner, and investment or deposit of its funds in specified modes.
3. Sections 11 and 12: Income derived from property held under
trust wholly for charitable purposes in India or held in part
only for such purposes, is not included in the total income,
subject to the fulfillment of certain specified conditions
which, inter alia, include application or accumulation of its
income in the specified manner, investment or deposit of its
funds in specified modes, non-distribution of income for the
benefit of interested persons like trustee, founder etc. In
terms of section 2(15), `charitable purpose` includes, inter
alia, medical relief.
4. Section 35(1): In respect of expenditure on scientific
research, the following deductions are allowed while computing
income from profits and gains of a business:
(i) any expenditure (not being in the nature of capital expenditure)
laid out or expended on scientific research related to the business.
(ii) an amount equal to one and one-fourth times of any sum paid
to an approved scientific research association having its object
as the undertaking of scientific research or to an approved
university, college or other institution to be used for scientific
research.
(iii) any capital expenditure on scientific research (other than
expenditure incurred on the acquisition of land) related to the
business of the assessee, subject to certain conditions.
5. Section 35(2AA): An amount equal to one and one-fourth times
of any sum paid to a National Laboratory or a University or an
Indian Institute of Technology or a specified person (with a
direction that such sum shall be used for scientific research
under an approved programme) is allowed as a deduction while
computing income under the head `Profits and gains of business
or profession`.
6. Section 35(2AB): An amount equal to one and one-half times
of the expenditure incurred upto 31.3.2007 on scientific research
(not being expenditure in the nature of cost of any land or
building) on an approved in-house research and development
facility by a company engaged in the business of bio-technology
or in the business of manufacture or production of any drugs,
pharmaceuticals, electronic equipment, computers,
telecommunication equipments, chemicals or any other
notified article or thing.
7. Section 80G: 100% deduction for any sum paid to any fund
set up by a State Government to provide medical relief to the
poor, to the National Illness Assistance Fund etc., and 50%
deduction for any sum paid to any approved fund or institution
established in India for charitable purpose, the income of
which is exempt under the provisions of section 11 and 12 or
under clause (23C) of section 10 of the I.T.Act.
8. Section 80GGA: 100% deduction for any sum paid to a
scientific research association having as its object,
the undertaking of scientific research or to an approved
university, college or other institution to be used for
scientific research. The deduction is available to a donor
not having income chargeable to tax under the head `Profits
and gains from business and profession`.
9. Section 80 IB (8A): 100% deduction of profits and gains
is allowed for a period of 10 consecutive assessment years
to any Indian company having as its main object, scientific
research and development, and approved between 1.4.2000 and
31.3.2007 by the prescribed authority, subject to the
fulfillment of prescribed conditions.
10. Section 80 IB (11B): 100% deduction of profits and gains
is available for a period of 5 consecutive assessment years
to an undertaking deriving profits from the business of
operating and maintaining a hospital having at least one
hundred beds for patients and constructed between 1.10.2004
and 31.3.2008 in a rural area, subject to certain conditions.
(c), (d), (e) & (f): At present, Service Tax is not leviable
on services provided by medical personnel in their
professional capacity.