Important Keyword: Income Tax, Tax Benefits, Tax Benefits on PM Caares Fund.
Table of Contents
PM CARES Fund – A Complete Guide
The PM CARES Fund, established by the government, serves as a critical resource during public health crises such as the COVID-19 pandemic. It allows citizens to contribute towards supporting government efforts during challenging times. Notably, contributions made to the PM CARES Fund are eligible for a full tax deduction, offering an incentive for individuals and organizations to participate in relief efforts. This initiative underscores the collective responsibility and solidarity of the nation in times of crisis, emphasizing the importance of community support and national resilience.
PM CARE Fund
PM CARES Fund, officially known as the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund, was established by the Government of India in March 2020. It operates as a public charitable trust aimed at providing timely assistance during emergencies and distress situations, including crises like the COVID-19 pandemic. Managed under the guidance of the Prime Minister and other government officials, the fund serves several key purposes:
Provide Relief: The primary objective of PM CARES Fund is to offer immediate relief and assistance to individuals and communities affected by disasters, health crises, or emergencies. It ensures swift support reaches those in need, facilitating recovery and resilience.
Research and Development: Another crucial role of the fund is to promote and support research and development activities, particularly in areas critical to public health. This includes funding for research initiatives aimed at developing solutions to combat emerging health challenges.
Enhance Healthcare Infrastructure: PM CARES Fund allocates significant resources towards strengthening healthcare infrastructure. This involves investments in medical equipment, establishment of healthcare facilities, and support for healthcare professionals on the frontlines of emergencies.
Who can Donate to PM CARE Fund?
The PM CARES Fund, established by the Government of India, welcomes contributions from various entities including individuals, Hindu Undivided Families (HUFs), firms, and companies. The minimum donation amount is set at INR 10, and contributions must be made electronically or via UPI (Unified Payments Interface).
For companies, contributing to PM CARES Fund can be counted as Corporate Social Responsibility (CSR) expenditure under the Companies Act of 2013, providing an avenue for corporate entities to fulfill their social obligations.
Foreign entities and individuals residing outside India can also participate by contributing to the fund. Such donations are exempted under the Foreign Contribution Regulation Act (FCRA), making them eligible for tax exemption in their respective countries.
It’s important to note that PM CARES Fund operates solely on voluntary contributions from the public and does not receive funding from the national Budget. Therefore, expenditures from the fund do not require prior government approval, ensuring flexibility in deploying resources swiftly during emergencies and distress situations.
Tax Deductions on Donations made to PM CARES Fund
Donations made towards the PM CARES Fund are eligible for a 100% tax deduction under section 80G of the Income Tax Act. This provision allows individuals, Hindu Undivided Families (HUFs), firms, and companies to claim the entire amount of donation as a deduction from their taxable income.
Key points regarding tax deductions on donations to PM CARES Fund include:
Eligibility for Deduction: Contributions made to PM CARES Fund qualify for 100% deduction under section 80G. This deduction helps reduce the total taxable income, thereby lowering the tax liability.
Timing of Deduction: Donations made between April 1, 2020, and June 30, 2020, can be claimed for deduction in the Financial Year (FY) 2019-20 (Assessment Year 2020-21). Taxpayers can claim this deduction while filing their income tax returns for that year.
One-time Claim: It’s important to note that the deduction for donations to PM CARES Fund can be claimed only once. If a taxpayer claims the deduction in AY 2020-21, they cannot claim it again in subsequent years like FY 2021-22.
Exception for FY 2020-21: For the Financial Year 2020-21, individuals who have opted for the new tax regime are also eligible to claim a deduction on donations made to PM CARES Fund, despite not claiming other deductions under section 80G.
These provisions encourage individuals and organizations to contribute towards the PM CARES Fund by providing a tax benefit, thereby supporting national efforts during emergencies and distress situations. It reinforces the government’s initiative to mobilize public and corporate support for critical relief and rehabilitation efforts.
Select the Relevant Option Now, under ‘How to Donate’, select the relevant option
Enter the Details and Proceed Add in the details like name, address, PAN, country, nationality, e-mail ID, phone number, and amount of donation. Read the terms and conditions and then click on receive OTP.
Confirm the DetailsNow confirm all your details on the Confirmation screen.
Select a Payment OptionFrom the list of payment options available, select the one that’s suitable for you.
Get the Donation ReceiptAfter making the payment, you will be redirected to the invoice page from where you can access your Donation Receipt.
Citizens can also use the following information to donate:
PM CARES Fund Details:
Name of the Account: PM CARES
Account Number: 2121PM20202
IFSC Code: SBIN0000691
SWIFT Code: SBININBB104
Name of Bank & Branch: State Bank of India, New Delhi Main Branch
UPI ID: pmcares@sbi
Domestic Donation Payment Modes:
Debit Cards and Credit Cards
Internet Banking
UPI (BHIM, PhonePe, Amazon Pay, Google Pay, Paytm, Mobikwik, etc.)
RTGS/NEFT
Foreign Donation Payment Options:
Foreign credit/debit card
Wire transfer/ SWIFT
Additional Information:
PAN of PM CARES Fund: AAETP3993P
Address: Prime Minister’s Office, South Block, New Delhi, 110011
When claiming tax deduction under section 80G for donations to PM CARES Fund, ensure to provide mandatory details such as PAN of the fund and complete address of the registered office. This information is crucial for processing tax benefits related to charitable contributions.
Important Keyword: Income Tax, Tax Saving Methods, Tax Savings & Deductions.
Table of Contents
Save Tax with the Help of your Family
Family members can play a crucial role in helping you gain financial advantages, especially when it comes to income tax savings. By strategically associating a portion of your income with your family members, you can reduce your tax liability. In this article, we explore several effective methods to save on taxes through the involvement of family members.
Maximizing Tax Savings Through Family Members
Your family members can play a vital role in helping you achieve financial benefits, particularly when it comes to saving on income tax. By associating certain parts of your income with family members, you can effectively reduce your tax liability. Here are some methods to help you save taxes using your family:
Invest in the Name of Parents
If your parents fall into a non-taxable or lower tax bracket, you can invest money under their names by gifting them the amount. Monetary gifts to specified relatives are not taxed. This money can be invested in fixed deposits (FDs), the Senior Citizens Savings Scheme, and other such instruments. Senior citizens enjoy tax exemptions of up to INR 50,000 on interest income from savings or fixed deposits in any bank, post office, or co-operative bank. This means you can save up to INR 50,000 to INR 2,50,000 depending on your parents’ income, in addition to INR 50,000 from interest income.
Pay Rent to Parents
If you live with your parents in a house they own, you can pay them rent and claim a House Rent Allowance (HRA) deduction. Your parents can claim a deduction of 30% of the annual rent for repairs and maintenance under Section 24. This benefit is receivable under Section 10(13A). You can save the least of the following three:
Actual rent payable minus 10% of your basic salary
Total HRA provided by your employer
40-50% of your basic salary, depending on your residential conditions
Buy Health Insurance for Parents
Purchasing health insurance for your parents who are above the age of 60 allows you to claim a deduction of up to INR 50,000 for the premium paid. This benefit is available under Section 80D.
Joint Home Loan
If you and your spouse are co-owners and co-borrowers of a self-occupied property, both of you can claim tax benefits on the interest and principal payable for a home loan. This can help you save up to INR 7,00,000 depending on the home loan amount, with exemptions available under Section 80C.
Providing a Loan to Spouse
Instead of gifting money to your spouse, which would be taxed as your income, provide a loan at a reasonable rate of interest. Though the interest will be added to your income, if your spouse invests in an instrument with a higher return rate, you can save on taxes.
Education Loan
Taking an education loan for higher studies offers a tax benefit on the repayment of interest for up to 8 years, starting from the year in which interest payment begins. The loan must be from a government-approved financial institution. You can save tax under Section 80E.
Investing for Children
Invest in your child’s name in tax-saving instruments like PPF, mutual funds, ULIPs, and traditional insurance plans, which are eligible for tax benefits under Section 80C. Income earned from these investments will be taxed. To avoid this, opt for tax-free investments like PPF. Investments in equity mutual funds also remain tax-free if gains are less than INR 1,00,000 a year.
Tuition Fees, Education Allowance, and Hostel Accommodation Fees
If you haven’t fully utilized your Section 80C deduction limit, you can claim deductions for the tuition fees of up to two children. Salaried employees can also claim an exemption of INR 100 per month per child (up to two children) as children’s allowance and INR 300 per child as hostel expenditure allowance.
Deduction for Dependent with Disability
If you have a family member with a disability or specific disease requiring high medical expenses, you can claim a deduction under Section 80DDB for the expenses incurred on their treatment and maintenance.
Invest in the Name of Adult Children
If your child is above 18, their income will be taxed separately. If they fall under the tax-exempt category, you can gift them money. Investing this money in tax-free instruments will ensure the income earned remains tax-free.
Important Keyword: Income Tax, Tax Rebate, Tax Savings & Deductions.
Table of Contents
Income Tax Rebate under section 87A
The taxes paid by Indian citizens play a crucial role in enhancing the country’s economy. India’s income tax system is progressive, meaning that tax rates increase with higher income levels. To manage this, the Income Tax Department has established different tax slab rates for individuals based on their total income. To prevent taxpayers with low taxable income from bearing an excessive tax burden, the government has introduced provisions such as the income tax rebate under Section 87A, which helps to reduce the tax liability for eligible taxpayers.
What is an Income Tax Rebate Under Section 87A?
The rebate under Section 87A of the Income Tax Act helps taxpayers reduce their tax liability. Resident individuals with a net taxable income of less than or equal to INR 5,00,000 can claim a tax rebate of up to INR 12,500 or the amount of tax payable, whichever is lower. This rebate is applicable under both the old and new tax regimes, ensuring that those with lower taxable incomes do not face a heavy tax burden.
What are the Eligibility Criteria to Claim a Rebate u/s 87A?
Rebate under Section 87A of the Income Tax Act
Individuals can claim a rebate under Section 87A of the Income Tax Act if they meet the following conditions:
Eligibility
Only resident individuals can claim this rebate.
The total taxable income after deductions under Chapter VI- A (if applicable) must not exceed INR 5,00,000 until AY 2023-24.
From AY 2024-25, the limit under the new tax regime has increased to INR 7,00,000.
The rebate applies to the total tax liability before adding health and education cess.
The rebate amount is the lower of the total tax payable or the specified limits for Section 87A.
Senior citizens and super senior citizens are also eligible to claim this rebate.
The rebate is available under both the old and new tax regimes.
Note: Rebate under Section 87A cannot be availed against income from long-term capital gains on equity shares or equity-oriented mutual funds (Section 112A).
How to Calculate Tax Rebate u/s 87A
Calculate Gross Total Income
Sum up the gross total income from all sources for the financial year.
Claim Deductions
Reduce the gross total income by claiming all eligible deductions under Chapter VI-A.
Determine Net Taxable Income
Arrive at the net taxable income after claiming the tax deductions.
Check Eligibility for Rebate
If the net taxable income is up to INR 5,00,000 under the old regime or INR 7,00,000 under the new regime (from AY 2024-25), the taxpayer is eligible for the rebate.
Calculate Rebate Amount
The maximum tax rebate available under Section 87A is INR 12,500 under the old regime and INR 25,000 under the new regime (from AY 2024-25).
Mr Kumar, aged 45 years, is a salaried resident and has opted for a new tax regime.
Particulars
Amount (in INR) (AY 2023- 24)
Amount (in INR) (AY 2024- 25)
Gross Total Income
6,00,000
6,00,000
Deductions
Not Applicable
Not Applicable
Net Taxable Income
6,00,000
6,00,000
Tax Payable before cess
22,500
15,000
Tax Rebate u/s 87A
Not Available
(Since the taxable income is more than INR 5,00,000)
Important Keyword: Income Tax, Tax Savings & Deductions.
Table of Contents
Vivad Se Vishwas Scheme
There are around 85% pending cases in India, with 50% of these cases sponsored by the state government itself, highlighting the slow pace of the Indian judicial system. To address this issue, the government has introduced schemes aimed at faster resolution of pending cases. One such initiative is the ‘Vivad Se Vishwas’ Scheme, launched by the Income Tax Department in FY 2019-20 to expedite the resolution of pending tax-related disputes.
Latest Extended Due Date
The deadline for filing a declaration under the direct tax dispute resolution scheme, it was last extended to September 30, 2021. After this date, the scheme was discontinued.
What is Vivad Se Vishwas?
The scheme was designed to settle disputed tax amounts, including interest, penalty, or fees related to an assessment or reassessment order. Under this scheme, taxpayers could settle their disputes by paying 100% of the disputed tax amount and 25% of the disputed penalty, interest, or fee. In return, taxpayers were granted immunity from the levy of interest, penalty, and the initiation of any prosecution proceedings under the Income-tax Act for matters covered in the declaration.
The Central Board of Direct Taxes (CBDT) extended the due date following requests from taxpayers, tax consultants, and other stakeholders due to the severe COVID-19 pandemic.
Steps to File a Declaration under Vivad Se Vishwas
Login to the Income Tax Portal
Visit the Income Tax Portal and log in with your credentials.
Click on the Vivad Se Vishwas option.
Prepare and Submit DTVSV Form
Select the relevant assessment year and filing type.
Fill Out the Form
Complete Form-1 with the necessary details.
Fill Form-2 for the final submission.
Submit all required documents properly, using DSC (Digital Signature Certificate) or EVC (Electronic Verification Code) as applicable.
The Income Tax Department (ITD) collects substantial sums in taxes annually from taxpayers through methods like advance tax, self-assessment tax, or regular assessments against demands. These payments are facilitated via challans, which serve as the primary means of transferring tax funds. However, errors in selecting payment details within these challans can result in potential financial losses due to incorrect tax credits.
To address such issues and support taxpayers, the ITD has implemented an Income Tax Challan Correction Process. This process enables taxpayers to rectify errors made during the selection of attributes for tax payments in the challan. By leveraging this correction mechanism, taxpayers can ensure that their tax payments are accurately attributed and credited, thereby avoiding complications or financial implications arising from inaccuracies in tax credits.
What is Income Tax ChallanCorrection?
Challan Correction refers to the process of rectifying errors made in tax payments through challans. Errors can include selecting the wrong assessment year or other attributes, which can potentially lead to issues such as demand notices from the Income Tax Department (ITD).
Traditionally, correcting such errors involved a cumbersome process that often required physical visits to the Assessing Officer (AO), causing inconvenience to taxpayers. Moreover, there was a risk of revenue loss if a challan was mistakenly claimed twice.
Key Considerations for Online Correction
To streamline and simplify this process, the ITD has introduced an Online Challan Correction feature on its portal. This allows taxpayers to rectify mistakes directly through the Income Tax Portal, significantly reducing the hassle associated with manual corrections. However, there are specific conditions and restrictions attached to this online correction facility:
Applicability: Online challan correction is available for challans from Assessment Year (AY) 2020-21 onwards.
Types of Corrections: Online correction is limited to three minor heads:
Advance Tax (100)
Self Assessment Tax (300)
Tax on Regular Assessment (400)
Time Limit: There are specific time-bound windows for making corrections:
A 7-day window for corrections within the same Assessment Year.
A 30-day window for corrections involving Major and Minor Heads.
Challan Utilization: Corrections can only be made to challans that have not been utilized. This means the challan should not have been used for filing any Income Tax Return (ITR) or paying any demands.
Offline Process: For corrections that do not fall within the specified online correction parameters, taxpayers must follow the traditional offline challan correction process.
This initiative by the ITD aims to enhance taxpayer convenience and reduce errors in tax payments, ensuring smoother compliance with tax regulations. It marks a significant improvement in the efficiency of tax administration by leveraging digital solutions to address common taxpayer concerns effectively.
How to correct Income Tax Challan Online?
Steps for Online Correction:
Login to the Income Tax Portal. Navigate to Services Tab> Challan Correction.
Click on Create Challan Correction Request.
Select attributes that needs correction in challan. All the three options for challan correction are available from which a taxpayer can choose which attributes require changes in the particular challan.
Challan Identification. Select the mode for selecting challan based on Assessment Year or Challan Identification Number (CIN).
Challan Selection. The list of all the challans based on the selection made in Step 4 will reflect here. Select the challan that requires correction.
Update the challan attributes. The dropdown list is provided for each attributes including Assessment year, Major head and Minor head. The taxpayer can update the attributes to correct ones.
E-verify and submit the correction request. From the available options, e-verify the request and submit it. Once submitted, the screen will show successful submission to ITD.
Tracking Challan Correction Online
To track the status of challan correction online, taxpayers can follow these steps:
Visit the Income Tax Portal: Go to the official Income Tax Department website and log in using your credentials.
Navigate to Services: Once logged in, locate the ‘Services’ tab on the portal.
Select Challan Correction: Under the ‘Services’ tab, find and click on the option for ‘Challan Correction’.
Check Status: You can check the status of your challan correction request here. It typically takes around 7-15 days for the corrected challan details to reflect on the portal.
Correcting Income Tax Challan Offline
If the time limit for online challan correction has expired or if the correction required is not supported online (such as changing PAN details), taxpayers must opt for the offline challan correction process. Here’s how to proceed:
Visit Jurisdictional Assessing Officer (AO): Physically visit the office of your Jurisdictional Assessing Officer.
Submit Required Documents: Prepare the necessary documents, including:
A formal request form for challan correction.
Challan receipt showing the tax paid.
An indemnity bond stating your responsibility for any revenue loss to the department due to the correction.
Process Initiation: Submit these documents to the AO, who will initiate the challan correction process on your behalf.
Processing Time: The AO will process the correction, and it typically takes around 7-15 days for the corrected details to be updated.
