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Arjuna (Fictional Character): Krishna, the CBDT has brought a notification on 7.5.2021 related to section 269ST of the Income Tax Act for providing relief to Covid patients. Please explain section 269ST.

Krishna, (Fictional Character): Arjuna, Section 269ST provides that no person shall receive an amount of Rs. 2.00 Lakhs or more otherwise than by an account payee cheque or account payee bank draft or electronic clearing transfer system through bank accounts from the same person in a single day or for a single transaction or a single event/ occasion.

Any person who has received any sum in contravention of the provisions of Section 269ST shall be levied a penalty equal to the amount of the sum received. The provisions of this section do not apply to banks, post offices, financial institutions, etc. The further central government can notify the persons to whom the above provisions will not be applicable.

Arjuna: Krishna, what is the relief provided in the notification?

Krishna: Arjuna, The central government in exercise of its powers has notified all Hospitals, Dispensaries, Nursing Homes, Covid Care Centres, or similar other medical facilities providing Covid treatment to patients for section 269ST so that they can receive cash payments of Rs. 2 lacs or more. The relief is provided for payments received during the period 01.04.2021 to 31.5.2021.

Relief to Covid Patients only for payment to Hospitals in cash

Arjuna: Krishna, what care should be taken for availing the benefit of relaxation?

Krishna: Arjuna, Hospitals, Covid Care Centres, etc. should obtain PAN or Aadhaar of the patient and the payer. They should also keep a record of the relationship between the patient and the payer along with the cash receipt.


The patient/ payer should record the same for income tax purposes even though paid in cash.

Arjuna: Krishna, the above notification will provide relief to what extent?

Krishna: Arjuna, because of the severe Covid pandemic, provisions of section 269ST of Income-tax Act,1961 have been relaxed by the Central Govt. to provide relief to patients who are not familiar with net banking or other online payment modes. But the relief is only for the payments received during the limited period of 01.04.2021 to 31.5.2021 irrespective of whether the service is provided before or after such period. Hence it is doubtful to what extent this relaxation will provide relief during this pandemic.


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Category Income Tax, Other Articles by - CA Umesh Sharma