New Delhi: A Comptroller and Auditor General (CAG) report has pointed out that income tax exemptions worth hundreds of crores have been given to hospitals claiming to be charitable institutes, but they may be doing little or no charity.

CAGhas asked for measurable parameters to assess the extent of charitable activities by hospital trusts availing tax exemptions as the public exchequer could be losing crores without any public benefit.

While various sections of the Income Tax (I-T) Act allow hospitals, nursing homes and medical research institutes to avail of relief and incentives, many institutions that charge patients claim and get exemption by virtue of the fact that they are registered as trusts, the report pointed out.

The fact that the I-T Act has no performance-specific definition of what is "charitable" is part of the problem, says a CAG report. Many charitable trusts receiving significant amounts in gross receipts were not being selected for scrutiny by the I-T department, according to CAG.

The report examined cases completed from 2012-13 to 2015-16. Even when measurable parameters exist for assessing the extent of charitable activities, the I-T department is unable to deny exemption, said the CAG report. 

Since the I-T Act does not identify non-compliance with the BPT Act as grounds for denying exemption and has no measurable parameters of its own, these hospitals continue to get exemption worth crores despite flouting the conditions.

The audit found that these 10 hospitals alone had "availed non-justified exemption" that amounted to Rs 77 crore.