The Intelligence and Criminal Investigation Wing (ICIW) of India’s Income Tax Department has launched an inquiry into approximately 130 hospitals across Vidarbha. Multi-speciality hospitals, cancer centres and diagnostic labs have been asked to furnish detailed records amid suspicions of unreported high-value cash transactions.
Triggering the Probe: SFT Regulatory Requirements
Under the Statement of Financial Transactions (SFT) rules, hospitals must report any cash payment of ₹2 lakh or more for a single treatment, along with patient identity and related payment details. ICIW officials believe numerous hospitals failed to submit these disclosures properly. Preliminary checks suggest some may have deliberately omitted or fragmented payments to stay below reporting thresholds. Notices—served under Section 133(6) of the Income Tax Act, 1961—have required hospitals to submit ledgers, vouchers, diagnostic records and other supporting documents.
Why Healthcare Is Under the Scanner
Despite growing digital payment adoption, cash continues to play a major role in sectors like surgeries, fertility treatments and diagnostics. Working from patients travelling across state borders and paying in cash, hospitals are viewed as vulnerable nodes for tax evasion or fund diversion to other businesses. The tax-department source said: “Despite the spread of digital payments, cash still dominates in many treatments.” Chartered accountants linked to some hospitals are also being scrutinised for potential complicity in manipulating books.
Broader Implications and Compliance Push
This probe underscores a broader regulatory push toward transparency in cash-intensive sectors. Healthcare, long considered service-oriented rather than commercially audited, is now under stricter financial lens. Experts say hospitals must upgrade accounting systems, digitise billing, and ensure full compliance with SFT norms to avoid penalties. For patients and the public it sends a message: even institutions seen primarily as service providers are not exempt from financial accountability.
The investigation is ongoing, and hospitals in Vidarbha must now respond with full transaction records or face further legal action.
