Compliance KPIs for Hospitals & Healthcare

Hospitals operate under one of the most exemption-heavy GST regimes in India. Healthcare services by a clinical establishment are exempt under Notification 12/2017-CT(R) Sl. 74. The same hospital simultaneously runs fully taxable verticals: pharmacy retail, canteen, ambulance hire to corporates, room tariffs above Rs 5,000 per day (5% from 18 July 2022), and outsourced lab samples. The Income Tax side is equally split: salaried doctors are 192, consultant doctors are 194J, and a charitable trust hospital has a separate Form 10B audit calendar.

Cash compliance is sharper here than anywhere else. Section 269ST stops a hospital from accepting more than Rs 2 lakh in cash for an admission, deposit or surgery. The penalty equals the cash received and is on the hospital, not the patient.

1. Income Tax KPIs

The Income Tax Act 1961 — and the new Income Tax Act 2025 effective 1 April 2026 — keep the same pillars: pay advance tax on time, file an accurate return, and stay clean on cash. The KPIs below are the ones an audit officer pulls up first if your file lands on a scrutiny desk.

KPI / Compliance Item	Threshold & Action	Due Date	Source
Tax audit u/s 44AB	Turnover above Rs 1 crore. Every meaningful hospital crosses this.	30 Sep 2027	Sec 44AB
Charitable trust / Sec 8 Co. — Form 10B / 10BB	Mandatory audit of trust accounts where 12AB or 10(23C)(via) registration is claimed.	30 Sep 2027 (one month before ITR-7)	Rule 17B / 16CC
Cash receipt cap (269ST)	Strictly below Rs 2 lakh from one patient per admission, per surgery or per day. Display the policy at the cash counter.	Continuous	Sec 269ST
Cash payment cap (40A(3))	Disallowance for cash payment above Rs 10,000 per day per vendor (medicines, oxygen, linen).	Continuous	Sec 40A(3)
Sec 13(1)(c) — specified persons	Charitable hospitals must avoid concessional benefit to specified persons (trustees, doctors who are also trustees).	Continuous	Sec 13(1)(c)
ITR filing	ITR-5 / ITR-6 / ITR-7 (charitable).	31 Oct 2027	Sec 139(1) / 139(4A)

2. TDS KPIs

TDS payments are due by the 7th of the next month (March is 30 April), and quarterly Form 26Q or 27EQ returns drive Form 16 / 16A on TRACES. Late filing of the return alone costs Rs 200 per day under Sec 234E.

KPI / Compliance Item	Threshold & Action	Due Date	Source
194J — Consultant and visiting doctors	10% on professional fees above Rs 30,000 in the FY. Applies even when paid via revenue-share agreement.	7th of next month	Sec 194J
192 — Salaried doctors, nurses, admin staff	Slab-based monthly TDS on the basis of Form 12BB and regime declaration.	7th of next month	Sec 192
194C — Housekeeping, security, laundry, biomedical waste	1% / 2% on payments above Rs 30,000 single bill or Rs 1 lakh aggregate.	7th of next month	Sec 194C
194I — Premises rent (especially diagnostic centres)	10% on rent above Rs 2.4 lakh in the FY.	7th of next month	Sec 194I
194Q — Pharmacy and surgical consumables	0.1% on purchases above Rs 50 lakh from one supplier (turnover above Rs 10 crore).	7th of next month	Sec 194Q
Quarterly returns and Form 16 / 16A	Quarterly Form 26Q plus annual TDS certificates from TRACES.	31 Jul, 31 Oct, 31 Jan, 31 May	Rule 31 / 31A

3. GST KPIs

GST is the most data-rich compliance regime — every invoice you raise and every invoice you receive sits on the network. Use GSTR-2B, not 2A, as your reconciliation base from FY 2022-23 onwards.

KPI / Compliance Item	Threshold & Action	Due Date	Source
Healthcare services (core)	Exempt. Services by a clinical establishment, an authorised medical practitioner or paramedics.	Continuous	Sl. 74 of Notification 12/2017-CT(R)
Room rent above Rs 5,000 per day (non-ICU)	5% with limited ITC.	Continuous	Notification 03/2022-CT(R)
Pharmacy — retail sale to outpatients	Taxable at the applicable medicine rate (5% / 12% / 18%). A separate GSTIN is often used.	Continuous	Sch I CGST
Pharmacy — bundled with indoor treatment	Treated as composite supply of healthcare and exempt.	Continuous	CBIC Circular 32/2018-GST
Canteen / cafeteria	5% (no ITC) under restaurant service classification.	Continuous	Notification 11/2017-CT(R) Item 6(a)
Cosmetic / hair-transplant / dental aesthetic	18%. Not exempt under the healthcare definition.	Continuous	Notification 12/2017-CT(R) Para 2(zg)
Diagnostic lab services	Exempt under the same Sl. 74 limb.	Continuous	Notification 12/2017-CT(R)
GSTR-1 / 3B / 9 / 9C	Monthly returns plus annual return and reconciliation if turnover above Rs 5 crore.	11th / 20th / 31 Dec	Sec 37 / 39 / 44

4. Profession tax (Maharashtra)

Profession Tax is a state levy run by the Maharashtra Goods & Services Tax Department. There are two registrations and most businesses need both — one for the owner, one for the staff.

Registration	Who needs it / what you pay	Due date	Source
PTEC (Enrolment)	For the proprietor, partner, director, LLP or company. Flat Rs 2,500 per year for most non-salaried professions and businesses.	30 June	MahaGST PT Act 1975
PTRC (Registration)	For employers paying salary above Rs 7,500 p.m. (male) or Rs 25,000 p.m. (female). Slabs: Rs 175 p.m. for Rs 7,501–10,000 (male); Rs 200 p.m. plus Rs 300 in February if salary exceeds Rs 10,000. Annual ceiling Rs 2,500 per employee.	Last day of the next month	MahaGST PT Rules

5. Bookkeeping and the filing system

Section 44AA of the Income Tax Act and Section 35 (read with Rule 56) of the CGST Act set the bookkeeping baseline. For most non-professional businesses, books are required if income is above Rs 2.5 lakh or turnover above Rs 25 lakh in any of the three preceding years.

Minimum books to keep

• Cash book, bank book, journal and ledger — daily, on accrual basis (Sec 145 read with ICDS).
• Sales register and purchase register — invoice-wise, with HSN/SAC and GST.
• Stock register — opening, receipts, issues, closing. Mandatory under CGST Rule 56(2).
• Bills, vouchers, e-way bills and delivery challans behind every entry.
• Fixed asset register, block-wise, with the date the asset was put to use.
• TDS / TCS certificates downloaded from TRACES.
• IPD admission register, with patient-wise revenue split (room, doctor, pharmacy, surgery, investigation).
• Doctor agreement file, segmenting employment vs visiting consultant vs revenue-share. This drives 192 versus 194J.
• Drug stock register (Form 19 under Drugs & Cosmetics Act 1940), expiry-wise.
• Biomedical waste manifest (BMW Rules 2016) — quarterly Form II to the State Pollution Control Board.
• Charitable hospital workings: Form 9A and 10 (accumulation), Form 10BD and 10BE (donation receipts) where 80G is claimed.

How long to keep them

• Income Tax: 6 years from the end of the relevant Assessment Year (Sec 149). For reopened or search cases, up to 10 years.
• GST: 72 months from the due date of the annual return for the year (CGST Sec 36).
• Companies and LLPs: 8 financial years (Sec 128 Companies Act 2013 / corresponding LLP rules).

6. Sector-specific compliance traps

The four mistakes our team sees most often when we take over books from another firm:

7. Annual compliance calendar (FY 2026-27)

Month	Compliance milestones
April	TDS payment for March (30 Apr); GSTR-1 / 3B for March; PT employee deduction.
May	Q4 TDS return Form 26Q (31 May); Form 16A; SFT-005 / 61A (31 May).
June	Form 16 to employees (15 Jun); Q1 advance tax (15 Jun); PTEC payment (30 Jun).
July	Q1 TDS return (31 Jul); ITR for non-audit cases (31 Jul); QRMP option last month.
August	Routine GSTR-1 / 3B; e-invoice review.
September	Tax audit report u/s 44AB (30 Sep); Form 10B / 10BB (30 Sep) for trusts; Q2 advance tax (15 Sep).
October	Q2 TDS return (31 Oct); ITR for audit cases (31 Oct); GSTR-9 prep starts.
November	ITR for transfer-pricing cases (30 Nov).
December	Q3 advance tax (15 Dec); GSTR-9 / 9C filing (31 Dec).
January	Q3 TDS return (31 Jan); books reconciliation for FY closing.
February	Stock-take preparation; PT special slab (Rs 300 in Feb).
March	Q4 advance tax (15 Mar); Annexure V for GTAs (31 Mar); books closure; year-end TDS.