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Easy Way to Save Income Tax During The COVID-19 Lockdown

Team AckoJun 16, 2021

People all over the globe are worried about a new enemy. COVID-19 (Coronavirus) has managed to halt globalization. People are dying, economies are getting affected, and national leaders are worried. The scientific community is working day and night to find a vaccine against the virus.

Save Income Tax During The COVID-19 Lockdown

In such unprecedented times, you can contribute by adhering to the rules and regulations stated by your State and Central Governments during the Lockdown and the Social Distancing period. Staying home and ensuring that your family members also do so can go a long way in stopping this virus from spreading. Another way in which you can help is by donating money to the State and Central Government’s charity funds. You can also save tax by donating money. Read ahead to know more.

How to Save Income Tax by Donating to the PM CARES Fund and CM Relief Fund During the Coronavirus Lockdown:

Donations made to the Prime Minister’s Citizen Assistance and Relief in Emergency Situations (PM CARES) fund will be liable for tax benefits as per Section 80G of the Income Tax Act. Similar benefits are also extended for donations made to the Chief Minister’s Relief Funds of respective states. Thus, by donating, you can not only help your fellow countrymen but also save tax in the process.

Here’s an example. Mr A’s has an annual income of Rs. 15 lakhs. He decides to generously donate Rs. One lakh to PM CARES fund. Mr A is, therefore, eligible for 100% deduction according to the Income Tax Act’s Section 80G, which pertains to donations. Mr A will get tax exemption for his donation of Rs. One lakh. He will have to claim the deduction while filing Income Tax returns by sharing the donation certificate/receipt.

The PM CARES fund was created to have a dedicated fund for the country to deal with an emergency, for example – the novel Coronavirus crisis. It is aimed at providing relief to those who get affected by such catastrophes. Individuals, as well as organizations, can contribute to this fund and help the country in the time of distress.

Contributors to the fund will receive 80G benefits and 100% exemption as per the provisions of the Income Tax Act, 1961. Donations to the fund will also be noted as an expenditure made as a part of Corporate Social Responsibility as per the Companies Act, 2013. People residing in other countries and international organizations can also contribute.

Note that the information shared in the article is meant to create awareness and help those who want to donate and save tax, and not to give financial advice or share bank account numbers. Please verify the authenticity of the accounts before making any kind of donations.

Here are the steps through which you can donate to the PM CARES Fund via the official website.

  • Step 1 – Visit the official website of PM CARES.

  • Step 2 – Select the type of donation. You can choose from Domestic Donations, Foreign Donations via Debit and Credit cards, and Foreign Donations Via Wire transfer or SWIFT.

  • Step 3 – Enter basic details such as name, address, mobile number, etc.

  • Step 4 – Carefully enter the amount you would like to contribute to the fund.

  • Step 5 – Go through the terms and conditions and tick the given box to proceed if you are comfortable.

  • Step 6 – Click in Review and Generate One Time Password (OTP).

  • Step 7 – Enter OTP and complete the process.Step 8 –Download your receipt.

Here are the steps through which you can donate to the PM CARES Fund via Net Banking or transferring funds online.

  • Step 1 – Visit PM India’s website.

  • Step 2 – Select ‘Click Here for Donation Details’.

  • Step 3 – Note the account name, number, and IFSC Code.

  • Step 4 – Make an Online Fund Transfer using the details noted in step 3.

  • Step 5 – Note down the Transaction ID.Step 6 – Get Receipt.

Also, read: Income Tax Slabs and Rates in India

Here are the steps through which you can donate to the PM CARES Fund via BHIM UPI.

  • Step 1 – Visit the Official BHIM UPI website.

  • Step 2 – Note the UPI ID.Step 3 – For the QR code, click the corresponding link and contribute.

Here are the steps through which you can donate to the PM CARES Fund via PAYTM.

  • Step 1 – Visit PAYTM’s website and select the “PM CARES Fund” from “Donation” or “Contribution” section.

  • Step 2 – Enter your name.

  • Step 3 – Enter the amount you would like to contribute.

  • Step 4 – Click ‘Proceed’ and complete the process.

You can also donate directly via the PAYTM APP and other popular Apps such as Amazon Pay.

Here are the steps through which you can donate money to the PMNRF.

  • Step 1 – Visit PMNRF’s official website.

  • Step 2 – You scan the given QR code and contribute via BHIM/UPI.

  • Step 3 – For online donation, fill the given form, click ‘Continue’, and complete the process.

Just as the PM CARES fund is for the nation, the CMRF is state-specific. Different states will have their respective funds. You can contribute to your preferred Chief Minister’s Relief Fund and get exempted for your contribution from Income Tax as per Section 80G of the Income Tax Act.

Here’s an example of how you can donate to Government of Maharashtra’s Chief Minister’s Relief Fund

  • Step 1 – Visit the CMRF Maharashtra’s official website.

  • Step 2 – Select your Donor Category, for example – Individual.

  • Step 3 – Select from a list of funds that you would like to contribute to. For example, the Chief Minister’s Relief Fund for COVID-19.

  • Step 4 – Click ‘Submit’.

  • Step 5 – Fill in personal details.

  • Step 6 – Click ‘Donate Online’ and complete the process.

Also, read: Income Tax Department Toll-Free Contact Numbers and Email IDs

Just as the above section explained how you can contribute to Maharashtra’s CMRF, you can go through the following table to know your preferred state’s donation details and complete the process.

CMRF Fund State Official CMRF Website Link for Donation
Chief Minister Relief Fund Andhra Pradesh Official AP CMRF website
Chief Minister’s Bihar Relief Fund Bihar Official Bihar CMRF website
Haryana Corona Relief Fund Haryana Official Haryana CMRF website
Government of Kerala Chief Minister’s Distress Relief Fund Kerala Official Kerala CMRF website
Chief Minister’s Covid-19 Relief Fund Manipur Official Manipur CMRF website
Meghalaya CM’s Relief Fund Meghalaya Official Meghalaya CMRF website
Chief Minister’s Relief Fund Nagaland Official Nagaland CMRF website
Chief Minister Relief Fund (For-Covid 19) Odisha Official Odisha CMRF website
Punjab Chief Minister Relief Fund – Covid 19 Punjab Official Punjab CMRF website
Rajasthan CMRF Covid-19 Mitigation Fund Rajasthan Official Rajasthan CMRF website
Government of Tamil Nadu CM’s Public Relief Fund (CMPRF) Tamil Nadu Official Tamil Nadu CMRF website
Telangana Chief Minister Relief Fund Telangana Official Telangana CMRF website
West Bengal State Emergency Relief Fund West BengalOfficial West Bengal CMRF website

Other Ways to Save Income Tax:

Apart from making donations and getting a benefit as per Section 80G, you can also invest money in other financial products and save income tax. Here are some of the popular options.

  • Invest in tax-saving Mutual Funds

  • Buy Life Insurance

  • Choose a suitable Health Insurance Policy

  • Deposit money in the National Pension Scheme

  • Open a five-year tax-saved Fixed Deposit

To know about more options, read “32 ways to save income tax.” 

Frequently Asked Questions:

Listed below are some of the commonly asked questions related to saving tax via making donations to the Centre and State Government’s charity initiatives.

What is Section 80G?

Section 80G is a part of The Income Tax Act, 1961. It deals with donations and charity. You can avail tax deductions on making donations as per the terms and conditions mentioned in Section 80G of the act.

Can I donate to the PM CARES fund via the Arogya Setu App?

Yes, you can donate to the PM CARES fund through the Aarogya Setu App. Learn More about “How to Download and Use Aarogya Setu App

For which Financial Year or Assessment year will the donation to PM CARES Fund and CM Relief Fund be applicable for Income tax exemption/rebate?

If you donate before June 30, 2020, the rebate will be considered for the year 2019-20.

Are donations to Coronavirus fund exempted from Income Tax?

Donations made to specific funds (for example, PM CARES fund) are exempted from tax calculation. Make sure to go through the details regarding tax rebates before donating.

Is there a minimum donation amount to contribute to the PM CARES Fund?

The lower limit to donating to the PM CARES Fund is Rs. 10.

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