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Request for clarification to facilitate employee contributions to PM CARES Fund   Apr 10, 2020

The taxpayers deeply appreciate the government’s initiative to set up the “Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND)” to provide relief to the persons affected from the outbreak of Coronavirus. Further, the swift and positive response of the government to the taxpayers’ ask for clarification on 100% deduction under section 80G of the Income tax Act, 1961 for contribution to this Fund is truly commendable. It will incentivise many taxpayers, including individuals, to come forward and contribute towards this cause.
 
Sir, it is heartening to note that as the date for claiming deduction u/s 80G under IT Act has been extended up to 30 June 2020, the donation made up to this date shall also be eligible for deduction from income of FY 2019-20. There are many organisations where the employees have voluntarily come forward to contribute from their salaries to the PM CARES Fund through their employers. However, since the donation will be made by the employer by way of a consolidated payment, currently it is not clear if the employees can claim deduction under section 80G on the basis of the certificate issued by the employer.

In this context, vide Circular No. 2/2005 dated 12 January 2005, the CBDT had clarified in the past that in cases where employees make donations to the Prime Minister’s National Relief Fund, the Chief Minister’s Relief Fund or the Lieutenant Governor’s Relief Fund through their respective employers, it is not possible for such funds to issue 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. Hence, it was clarified that the claim in respect of such donations will be admissible on the basis of the certificate issued by the employer in this behalf.

It is suggested that to further facilitate the donations by employees to the PM CARE Fund, the Government may issue a Circular at the earliest clarifying that in respect of consolidated contributions by the employer, an employee who makes donations towards the PM CARES Fund through the employer shall be eligible to claim deduction under section 80G of the Act on the basis of the certificate issued by the employer in this behalf.
 
 

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