The Hon’ble PM has taken a very good initiative of setting up the PM CARE Fund as a public charitable trust to motivate people to contribute to a cause that has threatened humanity across the globe and to raise resources required for fighting the coronavirus pandemic.

This trust has been notified under section 80G(5) with the result that contribution to this fund shall be eligible for deduction only at the rate of 50 percent of such contribution. As against this, the contribution to the existing PM National Relief Fund is eligible for a 100 percent deduction of the amount contributed.

The objective of this PM National Relief Fund is also to raise resources to meet the challenge of natural calamities which will include the present one arising on account of coronavirus.

Thus this difference of deduction of 50 percent on contribution to PM CARE fund as against 100 percent deduction for PM National  Relief Fund has created a dilemma for all the contributors whether to contribute to this fund or to contribute to PM Relief Fund. This is more so when the money contributed to PM National Relief Fund can always be transferred or utilised for coronavirus pandemic welfare measures also.

The tax advantage is one of the motivations to contribute to the cause. Restricting deduction to 50 percent for this fund by implication conveys that the importance of contribution to this PM CARE Fund is being considered lesser than a contribution to PM National Relief fund which can never be the intention.

It may further be relevant to point out that under section 80G(2), a number of funds set up to meet specific eventuality like the present one are eligible for a 100 percent deduction. Thus there is a need to reconsider and allow 100 percent exemption for this fund also.