Donation by employees to PM-CARES fund through employer to reflect in Form 16 TDS certificate

Donations made to the Prime Minister’s Citizen Assistance and Relief in Emergency Situations (PM-CARES) Fund are eligible for 100 percent deduction u/s 80G of I-T Act.

In a notice, the Central Board of Direct Taxes has said that in cases where donation is made by an employee through his/her employer, a separate certificate u/s 80G will not be issued for every employee as contribution to the fund is in the form of consolidated payment.

“It is hereby clarified that the deduction in respect of such donations will be admissible u/s 80G of the Act on the basis of the Form 16/certificate issued by Drawing and Disbursing Officer/Employer in this regard,” the CBDT said.

Nangia Andersen Consulting Director Shailesh Kumar said in many cases, the employees are donating a portion of their salary (viz one day or one week or one month, etc) to the PM-CARES fund, through their employers.

“In all such cases, Form 16 issued by employer will be considered to be a conclusive evidence of donation made by employee and tax deduction u/s 80-G shall be allowed to the respective employee. This is a welcome move by the CBDT and will encourage employees to donate for this noble cause through their employers, at the same time making them eligible for tax benefit of such donation,” Kumar said.

AKM Global Partner Amit Maheshwari said: “This is an important clarification as there was apprehension in the minds of several employees as to how they would get the benefit after contributing to this noble cause. This clarification has made availing tax benefit simpler for them now”.
(Disclaimer: Additional background information has been added to this PTI copy for context)