The Ministry of Finance issued a notification Tuesday evening extending the date for claiming deduction u/s 80G under IT Act up to 30.06.2020, which was hailed by Corporates as well as cooperative sectors.
Hailing the decision of the govt, Nafcub President thanked Finance Minister and the Home Minister for the same with these words “At last, today late evening Ministry of finance have issued a press note. Payment to PM care funds up to 30 June is eligible for deductions for the Income year 2019/ 20. Thanks to Nirmalaji & Amitbhai Shah.”
It bears recall that while requesting the urban cooperative banks to give donations of 2% of their net profit to the PM Cares Fund, Nafcub President had also simultaneously demanded extension of time limit u/s 80G to 30th June 2020 for donations made to fight the Corona scare by writing letters to the Finance Minister as well as to the Union Home Minister.
The Finance Ministry in its notification, among other things, makes a special mention of donations made to the PM Cares Fund. The notification reads “The Ordinance also amended the provisions of the Income-tax Act to provide the same tax treatment to the PM CARES Fund as available to the Prime Minister National Relief Fund. Therefore, the donations made to the PM CARES Fund shall be eligible for 100% deduction under section 80G of the IT Act.”
“Further, the limit on deduction of 10% of gross income shall also not be applicable to donations made to the PM CARES Fund”, the notification adds.
As the date for claiming deduction u/s 80G under IT Act has been extended up to 30.06.2020, the donations made up to 30.06.2020 shall also be eligible for deduction from income of the FY 2019-20, reads the Ministry’s notification.
“Hence, any person including corporate paying concessional tax on income of FY 2020-21 under new regime can make donation to PM CARES Fund up to 30.06.2020 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”, it concludes.
In his letter to the FM, Nafcub President wrote “Madam, the 1541 strong urban cooperative banking sector with total of nearly 20 million membership of which the NAFCUB is the apex representative body, is keen on making contributions for the financial year 2019-20 and also for 2020-21 to the maximum amounts possible from out of their profits.”
“We urgently request you to allow the contribution made to the PMCARES Fund, PMRF & CMRF on payment basis up to 30th June 2020 for the F.Y. 2019-20 and advise RBI to consider contribution made after 31st March 2020, i.e. up to 30th June 2020, to be for the Financial Year 2019-20, so that the banks could make further contributions after June 30th 2020, for the financial year 2020-21”, he stated.
“Having the govt done its part, now it is up to the UCBs to come forward and donate 2% of their profit to the PM Cares Fund”, said a Ministry official on condition of anonymity to the Indian Cooperative.