What is the PM Cares fund?
The government has set up the Prime Minister’s citizen assistance and relief in emergency situations fund which is called the PM cares fund to deal with any kind of emergency on dangerous situations like which is caused by the COVID-19.
The government of India has started Prime Ministers’ citizen assistance relief in emergency situations, so it is called the PM shares fund. And the purpose of the PM care is to deal with any emergency situation or any discuss the situation like the situation that we are undergoing right now like the COVID-19.
Why PM Care Fund is made?
This fund has been set up going to a number of requests made by people to support the government in the wake of COVID-19. Many requests made by people in order to support the government in the wake of COVID-19 Emergency.
So based on this day will be discussing the PM cares fund. We will see what are the important provisions of it and how it is going to be utilized how is the implementation of how is the contribution taken also as desired will be compared with the already existing Prime Minister’s relief fund.
The funds are dispersed for two purposes, to deal with calamities second one is for medical treatment.
Disbursement is made with the approval of the prime minister. The approval of the Prime Minister is necessary for the dispersal of the funds. And the fund is recognized as at rest under the income tax act and the same is managed by the Prime Minister or multiple delegates for National courses. PM care also it is considered as a trust.
The explanation of PM Care Fund
So let’s come to the details coming to the details of the fund. So this is a Public Charitable Trust this fund is the Public Charitable Trust. So the fund itself is considered as a charitable trust. And the chairman of the trust will be the Prime Minister of India.
Prime Minister will act as the chairman of this trust. So it is a Public Charitable Trust and the chairman of the trust will be the Prime Minister. And other members of the trust include the Defence Minister, the Home Minister, Finance Minister, etc. So other members are three ministers of the union government who handle the most important portfolio of the union like the Defence, Home Affairs, and the finance.
So three most important ministers who have and the most important portfolio of the Government of India. And the fund enables micro-donations as a result of which a large number of people will be able to contribute to the fund with their smallest of denominations. so a feature of this fund is that this funding enabled micro-donations, micronations mean donations of the small amount so donations of small amount are possible under this funding which means that any individual if I or you if you want to make some small contributions you can do it you can make even small contribution. this enables micronations and as a result of this what happens many people will be able to contribute their possible little to the fund which will make the fund a huge amount.
and the fund will strengthen disaster management capacities and encourage research on protecting the citizens. so that the utility of the fund for which purposes for what purpose is this fund will be utilised this will be used to make strong the disaster management capacity and to encourage research on protecting the citizens. these are the utilities of the fund.
The Contribution to PM Cares
So the contributions which will be made to the PM care fund this will be qualified as CSR expenditure CSR is corporate social responsibility. The Ministry of Corporate Affairs the MCA Ministry of Corporate Affairs has clarified that the contributions that are made by the companies, companies mean those organizations that are registered under the Companies Act. those companies which make contributions to this PMC fund.
It will be Counted towards their mandatory CSR expenditure. so this is in a way helpful for the companies to meet their CSR requirements and for the government also this is beneficial because the companies anyway it is mandatory for certain companies to provide their CSR contribution. so in that way companies will be opting to spend this money on PMKS. so the government also will easily receive money or donations in this fund.
so for the government as well as for the companies, this is very much beneficial to the Ministry of Corporate Affairs has clarified that any company any organization which is registered under Companies Act if they make a contribution towards the PM cash fund then this is going to be counted in their CSR expenditure in their corporate social responsibility expenditure.
And the term Corporate Social Responsibility, in general, it can be referred to us corporate initiative in order to assess and take responsibility for the company’s effects on the environment and impact on social welfare. so corporate social responsibility means that the responsibility of the corporate of the companies to extend a part of their profit a part of the earnings towards the society towards the environment.
Because in the process of development and growth the companies are utilizing the resources of the social resources of the environment which is very common to everyone. So in return, the companies are providing something in the form of CSR it is corporate social responsibility.
and now under the Companies Act 2013 the companies which have a minimum net worth of rupees 500 Crore or turnover of thousand crore or net profit of 5 crores they are required to spend at least two percent of their average profit for the previous 3 years on CSR activities every year.
so this is the mandate, so this is the applicability of the CSR. applicability here means which companies are liable to maintain the CSR account.
Under the Companies Act What Are The Conditions
This is for companies minimum net worth of the company is the net worth 500 Crore or about the turnover of the company is thousand crores or above or if the net profit and net profit of the companies 5 crore or above then two percent of the average profit for the last 3 years has to be spent on CSR activities.
so this is what the Companies Act amended and this is very important the conditions and the applicability of CSR. this is very very important.
Difference Between PM Care Fund & Prime Minister’s National Relief Fund
The Prime Minister’s national relief fund was instituted in the year 1948 that is very soon after Independence. Independence was in the year 1947 and soon after independence, almost after one year the Prime Minister’s national relief fund was instituted and it was instituted by the then Prime Minister Jawaharlal Nehru the first Prime Minister.
and the purpose of the Prime Minister’s national relief fund during the time of initiation was to assist the displaced persons from Pakistan. so in 1948, it was instituted and then the purpose of this fund was to assist The displaced persons from Pakistan after partition.
and currently, the fund is used primarily to tracking natural calamity so at present currently, these funds are now used to tackle the natural calamities like floods and cyclones earthquakes, etc.
and the fund is also used to help with medical treatment like kidney transplantation cancer treatment acid attack etc. so it is used for medical purposes or medical treatment and also it is used for tracking the natural calamities.
and the fund consists entirely of public contributions and does not get any budgetary support this is also a very important point. The Prime Minister’s national relief fund it does not get any budgetary allocation in the budget in the union budget know allocation is made for this Prime Minister national relief fund.
but rather the fund has entirely consisted of public contributions that mean the contributions from the general public. so this is the source of funding for this relief fund. and its Axis voluntary contributions from individuals organizations trust company Institutions etc.
so public contributions are accepted and this is the sole source of funding to this . and the Corpus of the fund is also invested in various forms with scheduled commercial banks and other Agencies. so the fund the purpose of the fund the amount is invested in various forms in commercial banks and also in other agencies.
Is There Any Tax Reduction in PM Care Fund?
The contribution towards the Prime Minister’s national relief fund they are notified for a hundred percent of tax reduction from taxable income under section 80G of the Income Tax Act of 1961.
So what does it mean?
Suppose if you have made a contribution of rupees 100000 to the Prime Minister’s national relief fund and your total income Rs 10 lakh so while calculating your tax or while your filing the income tax return, this one lakh rupees would be exempted that means only 900000 rupees would be counted or will be taken into consideration for the purpose of calculating the taxes of file in the income tax returns.
So contributions that you make towards the fund it is 100% deducted from taxable income under section 80G of the Income Tax Act of 1961.