DONATIONS MADE THE PM CARES TO FUND SHALL BE ELIGIBLE FOR THE FOLLOWING BENEFITS
• 100 percent deduction under section 80G of the Income-Tax Act.
• The Donations made till 30th june 2020** shall be eligiblefor deduction from income of FY 2019-20.
• Taxpayer may still opt for the concessional tax regime of FY 2020-21 by claiming deduction u/s 80G in FY 2019-20. '
• Restriction of 10% of Gross Total Income will not be applicable to donations made for PM CARES fund.
Tax Benefits u/s 80G are Valid for PM CARES Fund Donation on Income in FY-2019-20
Year 2020 has begun with a scare alert of COVID-19 pandemic throughout India and the whole world. People’s life is badly affected with the restrictions of self-isolation, curfew and lockdown that went for more than 3 months throughout the country and still in place to break the life cycle of this deadly disease spreading virus. To provide life support and vital aids in this crisis time, Prime Minister of India, Narendra Modi has called for donation in PM CARES Fund (Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund). Many have contributed in this fund to help deal with this struggling situation and now, good news comes for these contributors who will enjoy a tax benefit out of this donation.
Benefits on Donation in PM CARES Fund for FY 2019-20 u/s 80G
Government has declared the tax deduction benefits over donation in PM CARES fund in the ordinance issued on March 31, 2020. Main benefits allowed for the taxpayers on this donation are:
- PM CARES Fund will be given same treatment as available for Prime Minister National Relief Fund. So, it is eligible of 100% deduction under section 80G of IT Act. Limit on deduction of 10% on the gross income shall also not be applicable for donation made to PM CARES Fund.
This means, if you have an income of INR 15 lakh in FY 2019-20 and donated INR 1 lakh in PM CARES Fund in 2020, your taxable income will be INR 14 lakh (deducting the whole donation amount made in the PM CARES Fund).
- Date of claiming 80G Deduction benefit over PM CARES Fund is extended till July 31, 2020.
This means, donations made in PM CARES Fund till June 30, 2020 with the income of FY 2019-20 will be allowed for 80G deduction. The taxpayers are to claim for this deduction in their IT Return whose due date is extended to November 30, 2020.
- Anyone, including the corporates, who are taking the new tax regime option with low tax rate and no deduction benefits allowed for their income of FY 2020-21, can get the deduction benefit u/s 80G over their donation in PM CARES Fund made till July 31, 2020, where the income is considered as that of FY 2019-20. Provisions of new regime tax options will still be available for their income of FY 2020-21.
This means, the taxpayers who have shifted to new tax regime option for their income of FY 2020-21 onwards, can donate in PM CARES Fund till July 31, 2020 (last date of claiming 80G deduction as allowed in old tax regime option) and avail its benefit in the IT Return of income of FY 2019-20, that comes under old tax regime regulations.
Salaried employees who have donated in PM CARES Fund through their employers till July 31, 2020 can avail 80G over the donation based on Form 16 data as issued by the employers.
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