TPAs TO CUT TAX ON HOSPITAL PAYMENTS

As per new rule of the Tax department, Third party administrators (TPAs) facilitating cashless treatment in hospitals for individuals holding health insurance will have to deduct tax upfront while making payments to hospitals on behalf of patients. The 10% tax to be deducted (TDS) will affect working capital management of hospitals and, thereby, erode profitability marginally. The Central Board of Direct Taxes has issued a circular making it mandatory for TPAs to deduct tax at source on payments to hospitals.