MLAG; Initial response to Union Budget 2016-17

by Dr Neeraj Nagpal, Convenor,Medicos Legal Action Group, Managing Director MLAG Indemnity, Ex President IMA Chandigarh
1) Doctors and other professionals have been included in Section 44AD; Section 44AD gives exemption to the individual from maintaining books of account , audit any such record if he pays tax on presumed profit of 8 % of gross receipts. According to Budget 2016 "Extend the presumptive taxation scheme with profit deemed to be 50%, to professionals with gross receipts up to `50 lakh"

This could have given relief to lacs of small and medium healthcare establishments specially clinics and nursing homes. However it has been presumed that profit which for any small or medium business is 8 % of gross receipts of upto Rs 2 Crore but in case of professionals it is 50 % of gross receipts of upto Rs 50 lacs.

Does this 50 % presumed profit occur in real life. I have a nursing home in Chandigarh and my gross receipts per year are just less than 1 cr. As per presumptive tax scheme it will be assumed I have an income of 50 lacs whereas in actual practice running a nursing home in Chandigarh does not give more than 10 % profit on gross receipts. Even for those who are running a clinic given the high rental, commercial electricity water , staff to fulfill requirements under CEA 50% profit on gross receipts is a utopian dream for doctors. Honourable finance minister has kept only advocates in mind when extending the presumptive Tax scheme to professionals by assuming a 50 % presumed profit for them. This however shows the mentality and the thinking of those in power that doctors earn lot of money.

2) Rs 6000 crore booster towards healthcare is meager and not sufficient to boost confidence among the healthcare providers.

3) 3000 Jan Aushadhi stores for the entire country where even the sparse Primary Health Centres number is 27000 is a cosmetic gesture. Also opening the stores and stocking them with neccessary drugs will remain to be seen.

4) The insurance cover upto Rs 1 lac per family and 1,30,000 for those over 60 yrs age is welcome but the devil will be in its details and implementation. It is not clear whether this benefit is for those below the poverty line (BPL) or for entire population. Also not clear is whether hospitals which will provide the care will be Government or Private and what will be rates of procedures. These are all issues which will bear close scrutiny from medical community.

5) Nephrology and problem of chronic renal failure patients has got the attention and help in this budget through National Dialysis Service Programme, which is good. However this kind of focus is needed on so many other diseases and specialities which is not feasible in the meagre amount budgeted for health again.

6) Trying to bring black money into mainstream by giving a window to those with undisclosed income to declare and pay 45% tax to convert it into white has been announced by the Finance Minister in this budget. Overall this is a good initiative not because doctors have excess black money but because doctors form the segment of society which universally pays its taxes. Bringing revenue into mainstream from sources other than traditional will ease pressure on genuine the tax paying communities like qualified doctors from being squeezed to cough up more and more towards "nation building"

Overall I am disappointed with the lack of focus on health in Budget 2016. Of the total 19.5 lac crores only 38000 odd crores is budgeted for health. Doctors and their associations had wanted some tax benefits from the honourable Finance minister specially to new hospitals being established. Atleast I have not found any mention of this in the budget.