Income Tax Exemption for employees donating to PM-CARES fund

Recently, the Central Board of Direct Taxes (CBDT) declared that an employee making a donation to the PM-CARES (Prime Minister’s Citizen Assistance and Relief in Emergency Situations) fund through the employer can claim for income tax deduction under Section 80G on the basis of Form 16 issued by the employer. The board stated that employers are required to mention the donation amount against employees in their respective Form 16. The TDS certificate would be considered as a conclusive evidence of donation and then they can claim for tax deductions under the particular section.

The clarification came as the employees, in many cases, have donated a portion of their salaries through their employers. “However, in all such cases, where actual donation is made by employees, the consolidated donation receipt is issued in name of the employer, as it goes into the fund through the employer’s account,” said Shailesh Kumar, director at Nangia Andersen Consulting.

Donation in PM-CARES

It’s a great idea to support the Nation and give generously to the fightback against the coronavirus. These donations will not only help the needy people but also reduce your tax liability. The tax break under Section 80G allows amounts donated to be deducted from the taxable income. However, there are a few terms and conditions in claiming the tax break.

Donate money, not things to avail benefits:

You can get deduction under Section 80G only if you donate money. So, if you want a tax break, donate funds, and not items. Also, donations in cash above Rs 2,000 are not eligible for deduction under Section 80G. So, if you intend giving more than Rs 2,000, do so in modes other than cash like cheques and internet banking.

Economy across the world is at a standstill with most of the nations under a lockdown as Coronavirus outbreak is already declared pandemic and over one million positive cases and more than one lakh deaths are reported globally.


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