The government having decided to treat the Covid-19 pandemic as a notified disaster, the MCA on 23 March 2020 clarified that the spending of CSR funds for Covid-19 is an eligible CSR activity under items (i) and (xii) of Schedule VII of the Companies Act 2013 relating to promotion of healthcare, including preventive health care and sanitation and disaster management.

Subsequently, on 28 March 2020, the government set up a public charitable trust by the name of ‘Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund’ (PM CARES Fund), with the primary objective of dealing with any kind of emergency or distress situation as posed by the COVID-19 pandemic, and to provide relief to the affected. In a press release issued by the PMO, an appeal was made to citizens and organisations to donate to this Fund, along with the website and account details and informed that donations made to this Fund would be eligible under section 80G of the Income Tax Act 1961.

On 28 March 2020, the MCA clarified that contributions to the PM CARES Fund is an eligible CSR activity under item no. (viii) of Schedule VII of Companies Act, 2013. The Secretary, MCA, has appealed to CEOs/corporates to donate any unspent CSR amount to the PM CARES Fund, if applicable. He further stated that contributions over and above the minimum prescribed amount would be set off against CSR obligations arising in subsequent years, if so desired.

The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 promulgated on 31 March 2020, inter alia, provides for the same tax treatment to the PM CARES Fund as available to the Prime Minister National Relief Fund. Accordingly, donations made to the said Fund would be eligible for 100% deduction under section 80G of Income Tax Act. Further, the limit on deduction of 10% of gross income shall also not be applicable for donation made to PM CARES Fund. The date for claiming deduction u/s 80G of the IT Act has been extended up to 30 June 2020, therefore, the donation made up to 30 June 2020 shall also be eligible for deduction from income of FY 2019-20. Hence, any person including corporates paying concessional tax on income of FY 2020-21 under the new regime can make donation to PM CARES Fund up to 30 June 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 income of FY 2020-21.