MCA Appeals to Corporate India for Contribution in PM CARES Fund
We all know that the Novel Coronavirus aka COVID-19 has affected over 110 nations of the world. Due to the number of casualties throughout the globe resulting from Coronavirus disease, a number of countries are now on complete deadlock. Moreover, the global pandemic has also caused a worldwide economic disruption, including in India, where the government is impelled to impose a lockdown in many districts.
In such a situation, the Ministry Of Corporate Affairs has required the corporate sector to assume a proactive role. In this regard, the MCA has recently introduced a mandatory simple e-form named Company Affirmation of Readiness towards COVID-19 or Form CAR. This form has been released with effect from 23rd March 2020. As a matter of fact, nearly 1.8 lakh companies have already filed this e-form.
As we know that in order to deal with any sort of emergency situation posed by the COVID-19 pandemic, the Government of India has set up the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund’, abbreviated as PM CARES Fund. The MCA has now appealed to the Corporate Sector to give their contribution to the PM CARES Fund, in order to cope with this grave situation.
1. What appeal has MCA to the companies?
The Ministry Of Corporate Affairs has earnestly appealed to the Cheif Executives of the Indian Companies to generously contribute towards the PM CARES Fund, in order to help the people affected due to the COVID-19 pandemic.
2. Whether any contribution towards the PM CARES Fund be taxed?
No. The MCA has stated clearly that any contribution made towards the PM CARES Fund shall be treated as admissible expenditure, towards fulfilling the Corporate Social Responsibility (CSR) as per Companies Act 2013.
Hence, any contribution towards the PM CARES Fund shall not be taxable.
3. What if CSR obligation already paid by a company?
MCA has appealed that if a company has already contributed towards the CSR obligation, to still contribute towards the PM CARES Fund, over & above the minimum prescribed amount of CSR obligation.
This contribution shall be later on offset against the CSR obligation in the coming years if the company opts for it.
4. What if a contribution has been made before 31st March 2020?
The ministry has stated that if a company has contributed towards the PM CARES Fund before 31st March 2020, this would also qualify for an exemption u/s 80G of Income Tax Act. The government has extended the time limit for CSR obligation to 30th June 2020. The taxpayers can hence avail the benefit of this exemption while ITR filing for FY 2018-19.
However, after 1st April 2020, this exemption will be available to only those companies who have opted for the old tax structure, since this exemption has been recently removed in Union Budget 2020.
5. What is the purpose of the PM CARES Fund contribution?
The contribution made by the companies towards the PM CARES Fund shall go towards upscaling the public health infrastructure by way of:-
Setting up new isolation wards
Procurement of protection gears
Procurement of ventilators
Besides many more activities needed to control the Coronavirus pandemic. You can be truly proud that your contribution is a part of it, and you can set an example for others.