Taxability for Hospitals


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Quick Summary
This discussion explores the tax classification of a hospital run as a proprietorship. It questions whether such an entity should be treated as a business or a profession for income tax filing, specifically regarding the use of ITR 3 and the applicability of Section 44ADA. The conversation highlights challenges with online filing codes and discusses TDS implications under Sections 194J and 194JB, referencing court decisions that classify hospitals as businesses.

19 July 2023 An Hospital run by doctor as a Proprietorship under nursing home registered under her name though she not practices her own practice with hiring other professional doctor on professional fees, purchase machinery and other equipment for hospital, hire nurses, lab, medical, and other staff, paying rent, electricity is an Business or profession can she file business return with ITR 3 without 44ADA.

19 July 2023 Whether any TDS gets deducted u/s. 194J over the hospital services?

19 July 2023 Yes u/s 194JB by Star health for Mediclaim

19 July 2023 As on today it has become difficult to file such activity as business, because there are no resorts available in efiling site. Business code for nursing home is under specified profession and not business, while it has been ascertained by courts that hospital is business and not profession.
Refer:: https://indiankanoon.org/doc/1734550/

19 July 2023 Thank you sir, but sir can i file ITR 3 on the basis of view taken by court.

19 July 2023 As everything is online, difficult to convince face to face. Better select different code for business and file ITR, but keep prepared or ready for any query and even for filing appeal.


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