Donation or Contribution to PM CARES Fund is fully exempt under section 80G of Income Tax Act, 1961. Anyone contributing to PM CARES Fund (Prime Minister’s Citizen Assistance and Relief Emergency Situation Situations Fund) will get full benefit under the Income Tax Act. Donation made to the PM CARES Fund shall be eligible for 100% deduction under section 80G of the IT Act. Further, the limit on the deduction of 10% of gross income shall also not be applicable for donation made to PM CARES Fund.
Prime Minister Shri Narendra Modi appealed to the citizens of the country to donate generously to the PM CARES Fund to provide relief to those affected by any kind of emergency or distress situation which is more relevant in today's scenario when the country is fighting against COVID-19 or coronavirus.
This is a special fund namely “Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND)” that has been set up for providing relief to the persons affected from the outbreak of Coronavirus. The public appeal of the Prime Minister came on March 28, 2020.
The government has notified Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 ("the Ordinance") on 31.03.2020 to provide relief to the taxpayers from certain statutory and regulatory compliances in the wake of COVID-19 outbreak.
Amended Provision of section 80G to allow 100% deduction for donation to PM CARES FUND
Chapter-III of the Ordinance has also amended two provisions of the Income Tax Act, 1961.
Section 4(i) of the Ordinance provides that the income of Prime Minister’s Citizen Assistance and Relief Emergency Situation Situations Fund (PM CARES FUND) shall be exempt from income tax under section 10(23C).
Section 4(ii) of the Ordinance provides for the insertion of Prime Minister’s Citizen Assistance and Relief Emergency Situation Situations Fund (PM CARES FUND) in section 80G(2) of the Income Tax Act, 1961.
Donation to a fund prescribed in section 80G(2) qualifies for 100 per cent deduction from the Gross Total Income of the assessee without any limit of 10% of adjusted Gross Total Income.
With this amendment in section 80G, a donation made to the PM CARES Fund shall be eligible for 100% deduction under section 80G of the Income Tax Act. Further, the limit on the deduction of 10% of gross income shall also not be applicable for donation made to PM CARES Fund.
The limit of deduction amount is, however, subject to gross total income. In other words, the deduction under section 80G cannot exceed the gross total income of the assessee.
Section 80G falls under Part-B of Chapter VI-A of the Income Tax Act, 1961. In the appeal press note released, it is stated that the donations to PM CARES Fund will be exempt from income tax under section 80(G) without providing any further detail on the quantum of deduction.
In this article, I had stated that the tax benefits to the PM CARES FUND will be kept at par with the tax benefits available to the PM National Relief Fund (PMNRF).
With the present amendment, the tax benefit of exemption/deduction for donation/contribution to the PM CARES FUND is given at par treatment as available for PM National Relief Fund (PMNRF).
The Ordinance amended the provisions of the Income-tax Act to provide the same tax treatment to PM CARES Fund as available to Prime Minister National Relief Fund (PMNRF). Therefore, the donation made to the PM CARES Fund shall be eligible for 100% deduction under section 80G of the IT Act. Further, the limit on the deduction of 10% of gross income shall also not be applicable for donation made to PM CARES Fund.
The fund is recognized as a Trust under the Income Tax Act and the same is managed by Prime Minister. PM CARES FUND operates from the Prime Minister’s Office, South Block, New Delhi-110011. PM CARES FUND is exempt under the Income Tax Act, 1961 under Section 10. Contributions towards PM CARES FUND are notified for 100% deduction from taxable income under section 80(G) of the Income Tax Act, 1961. Prime Minister is the Chairman of PM CARES FUND and its Members include Defence Minister, Home Minister and Finance Minister.
Permanent Account Number of PM CARES FUND is AAETP3993P.
The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 has relaxed certain provisions of the Income Tax Act. In respect of savings and investments, the date is extended up to 30.06.2020. In other words, any exemption or deduction can be claimed in the FY 2019-20 itself even if the same is paid or invested after 31st March 2020 but within 30.06.2020.
It may be noted that the end date of June 30, 2020 is subject to change. The government may notify a further date which will depend upon the circumstances and status of lockdown in the country at that time.
The date for claiming an exemption for donation under section 80G also gets extended by 30.06.2020.
The expression used in section 3(1)(c) "under any provisions of Chapter VI-A under the heading "B.-Deductions in respect of certain payments" thereof" and "and where completion or compliance of such action has not been made within such time, then, the time limit for completion or compliance of such action shall, notwithstanding anything contained in the specified Act, stand extended to the 30th day of June, 2020, or such other date after the 30th day of June, 2020, as the Central Government may, by notification, specify in this behalf" provides for benefit of deduction u/s 80G in the FY 2019-20 itself, as stated above.
Deduction for donation to PM CARES Fund under the new tax regime - Section 115BAC
Finance Act, 2020 has introduced a new section 115BAC which gives an option to an individual or a HUF to pay taxes at concessional rates compared to the existing rate of taxes. However, in the new tax regime under section 115BAC, no deduction is allowed under section 80G (in fact under any section which falls under chapter VI-A). Hence, if an individual opts to pay tax as per the new tax regime he will not get any benefit of a donation to PM CARES FUND. But remember, the new tax regime is applicable from AY 2021-22. For FY 2019-20 or AY 2020-21, the old tax regime prevails and hence any contribution or donation to PM CARES FUND till 30.06.2020 can be claimed as a deduction under section 80G for AY 2020-21.
Deduction for donation to PM CARES Fund under the new tax regime - Section 115BAC
Finance Act, 2020 has introduced a new section 115BAC which gives an option to an individual or a HUF to pay taxes at concessional rates compared to the existing rate of taxes. However, in the new tax regime under section 115BAC, no deduction is allowed under section 80G (in fact under any section which falls under chapter VI-A). Hence, if an individual opts to pay tax as per the new tax regime he will not get any benefit of a donation to PM CARES FUND. But remember, the new tax regime is applicable from AY 2021-22. For FY 2019-20 or AY 2020-21, the old tax regime prevails and hence any contribution or donation to PM CARES FUND till 30.06.2020 can be claimed as a deduction under section 80G for AY 2020-21.
Further, a domestic company which opted to pay concessional rate of tax under section 115BAA and section 115BAB is allowed to claim deduction under section 80G by the Finance Act, 2020. This is applicable for FY 2019-20 (or AY 2020-21). Form AY 2021-22, such a company cannot claim deduction under section 80G as per amendment by Finance Act, 2020. Donation to PM CARES FUND by such company is also available to it if the same is made by 30.06.2020. Further, such a donation shall also qualify for CSR expenditure.
Since the country is passing through an epidemic and there is a mass appeal to contribute to relief funds, it is the practice in many organisations that contribution from employees is collected by the employer by way of deduction from salary and a consolidated amount is remitted to the fund by the employer. In this case, since the donation is actually made by the employee, the employee shall be allowed the deduction u/s 80G. In this situation, CBDT has clarified as follows-
Consolidated donation by the employer on behalf of employees
In cases where employees make donations to the PM CARES FUND through their employers, it is not possible for such funds to issue a separate certificate to every such employee in respect of donations made to such funds as contributions made to these funds are in the form of a consolidated cheque. An employee who makes donations towards these funds is eligible to claim deduction under section 80G. It is, hereby, clarified that the claim in respect of such donations as indicated above will be admissible under section 80G on the basis of the certificate issued by the Drawing and Disbursing Officer (DDO)/Employer in this behalf - Circular No. 2/2005, dated 12-1-2005.
However, it is required to be seen how the practice will hold good when there is an amendment brought in by the Finance Act, 2020 which provides for allowability of deduction u/s 80G based on the online amount of donation in Form 26AS.
As the date for claiming deduction u/s 80G under IT Act has been extended up to 30.06.2020, the donation made up to 30.06.2020 shall also be eligible for deduction from income of FY 2019-20. Hence, any person including the corporate paying concessional tax on the income of FY 2020-21 under new regime can make a donation to PM CARES Fund up to 30.06.2020 and can claim deduction u/s 80G against income of FY 2019-20 and shall also not lose his eligibility to pay tax in concessional taxation regime for the income of FY 2020-21.
PM CARES Fund account details
Citizens and organisations can go to the website pmindia.gov.in and donate to PM CARES Fund using the following details:
Account Details
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Name of the Account
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PM CARES
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Account Number
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2121PM20202
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IFSC Code
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SBIN0000691
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SWIFT Code
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SBININBB104
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Name of Bank & Branch
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State Bank of India, New Delhi Main Branch
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UPI ID
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pmcares@sbi
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Online Modes of payments
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Debit Cards and Credit Cards
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Internet Banking
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UPI (BHIM, PhonePe, Amazon Pay, Google Pay, PayTM, Mobikwik, etc.)
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RTGS/NEFT
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