Donations made to PM-CARES Fund eligible for 100pc tax deduction

In a move to encourage contributions for the fight against the coronavirus pandemic, the government has decided to make all donations towards the PM-CARES Fund eligible for 100 per cent tax deduction.

The decision was part of an ordinance promulgated on Tuesday to put into effect the decisions announced by the Finance Minister last week regarding several compliance and regulatory norms in view of the coronavirus outbreak.

Further, the limit on deduction of 10 per cent of gross income shall also not be applicable for donations made to PM-CARES Fund.

An official statement said that among the decisions, "the ordinance also amended the provisions of the Income-tax Act to provide the same tax treatment to PM-CARES Fund as available to Prime Minister's National Relief Fund. Therefore, the donation made to the PM-CARES Fund shall be eligible for 100 per cent deduction under section 80G of the IT Act."

Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund' (PM-CARES Fund) has been set up for providing relief to the persons affected by the outbreak of coronavirus.

The official statement said that as the date for claiming deduction u/s 80G under IT Act has been extended up to June 30, 2020, the donations made till then shall also be eligible for deduction from income of FY 2019-20.

Hence, "any person, including corporate, paying concessional tax on income of FY 2020-21 under new regime can make donation to PM-CARES Fund up to June 30 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 income of FY 2020-21," it said.

The ordinance also extends the deadline for the income tax and GST return filing for the financial year 2018-19 till June 30, 2020, as announced by Finance Minister Nirmala Sitharaman last week.

It also extends the last date for linking Aadhaar and PAN to June 30.

The date for making various investment or payment for claiming deduction under Chapter-VIA-B of IT Act which includes Section 80C such as LIC, PPF, NSC, 80D (Mediclaim), 80G (Donations), among others has been extended to June 30, 2020. Hence the investment or payment can be made up to June 30 2020 for claiming the deduction under these sections for FY 2019-20.

The date for making investment, construction or purchase for claiming rollover benefit or deduction in respect of capital gains under sections 54 to 54GB of the IT Act has also been extended to June 30, 2020. Therefore, the investment or purchase made up to June 30, 2020 shall be eligible for claiming deduction from capital gains arising during FY 2019-20.

With this ordinance, the date for passing of order or issuance of notice by the authorities under various direct taxes and 'benami' law has also been extended till June 30. It also puts into effect the government's decision to extend durations of the dispute settlement schemes for direct taxes (Vivaad Se Vishwas) and indirect taxes (Sabka Vishwas) till June 30.