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Ordinance issued to make PM CARES donations tax free

The government has issued an ordinance to give effect to the relaxation in several compliances including extension in last dates to June 30 for making investments in instruments such as National Savings Certificates, Public Provident Fund for claiming income tax benefits.

ET Bureau|
Last Updated: Apr 01, 2020, 08.57 AM IST
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New Delhi: The government has issued an ordinance to give effect to the relaxation in several compliances including extension in last dates to June 30 for making investments in instruments such as National Savings Certificates, Public Provident Fund for claiming income tax benefits. Income tax Act, Benami Act are being sought to be amended via the ordinance - Taxation and Other LAws(Relaxation of Certain Provisions) Ordinance, 2020.

The ordinance also seeks to amend the Income Tax Act to enable 100% deduction to donations made to the PM's Citizen Assistance and Relief in Emergency Situations (PM CARES) Fund, set up to enable citizens to contribute to government’s containment efforts against the Covid-19 outbreak. "The government has brought in an ordinance which provides for extension of various time limits," said a finance ministry statement late Tuesday. The date for making various investments or payment for claiming deduction under 80C, 80D and 80G has been extended to June 30, 2020.

Any contribution made to the PM CARES Fund before March 31 would qualify for 80G exemption under the Income Tax Act, which allows donations made to specified relief funds and charitable institutions as a deduction from gross total income before arriving at taxable income.

Experts said that while contribution towards PM CARES Fund was eligible for 50% deduction since it was notified under section 80G(5), contributions made to PM National Relief Fund and to Chief Minister’s Relief Fund or Lieutenant Governor’s in respect of any State or Union Territory, were eligible for 100% deduction under Section 80G(1) read with clause (iiia) of section 80G(2).
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