New Delhi: The income tax department has allowed referral kickbacks paid to doctors by private hospitals, nursing homes and diagnostic centres and spending on advertisements by doctors as expenses despite such expenditure being disallowed and unethical, a parliamentary panel said on Thursday.
The public accounts committee for the Union finance ministry’s department of revenue has cited an audit that found that in 19 instances in eight states, income-tax officers had in contravention of provisions allowed such expenses.
A 2012 circular from the Central Board of Direct Taxes (CBDT) had said that expenses incurred by pharmaceutical companies on doctors were inadmissible as the Medical Council of India had prohibited them under its ethics rules for doctors.
In a report tabled in Parliament, the committee has cited audit observations that in nine instances in Maharashtra, the income tax department allowed advertisements and business promotion expenses totalling Rs 52.21 crore although the Medical Council deems advertising by doctors unethical.
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