A special fund ‘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. Contribution towards PM CARE Fund was eligible for 50% deduction in view of it being notified under section 80G(5), as against PM National Relief Fund, which is eligible for 100% deduction under Section 80G(1) read with clause (iiia) of section 80G(2).
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 National Relief Fund. Therefore, the donation made to the PM CARES Fund shall be eligible for a 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 donations made to PM CARES Fund.
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 an income of FY 2020-21.
The Press Release of the Ordinance which can be accessed at: https://taxguru.in/income-tax/fm-releases-ordinance-relaxation-24th-march-2020.html
Amendment of sections 10 and 80G of Act 43 of 1961.
4. In the Income-tax Act, 1961, with effect from the 1st day of April, 2020,‑
(i) in section 10, in clause (23C), in sub-clause (i), after the word “Fund”, the words and brackets “or the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND)” shall be inserted;
(ii) in section 80G, in sub-section (2), in clause (a), in sub-clause (iiia), after the word “Fund”, the words and brackets “or the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND)” shall be inserted.