Why in news?
The pandemic of COVID-19 has engulfed the entire world and has posed serious challenges for the health and economic security of millions of people worldwide. PM asked for donation to help the country in this crisis.
What is PM CARES?
- The Fund is a public charitable trust with the Prime Minister as its Chairman. Other Members include Defence Minister, Home Minister and Finance Minister.
- The Fund enables micro-donations as a result of which a large number of people will be able to contribute with the smallest of denominations.
- The Fund will strengthen disaster management capacities and encourage research on protecting citizens.
PM CARES and CSR
- The Ministry of Corporate Affairs has clarified that contributions by companies towards the PM-CARES Fund will count towards mandatory Corporate Social Responsibility (CSR) expenditure.
- Under the Companies Act, 2013, companies with a minimum net worth of Rs 500 crore or turnover of Rs 1,000 crore, or net profit of Rs 5 crore are required to spend at least 2% of their average profit for the previous three years on CSR activities every year.
- The term “Corporate Social Responsibility” in general can be referred to as a corporate initiative to assess and take responsibility for the company’s effects on the environment and impact on social welfare.
What is Prime Minister’s National Relief Fund (PMNRF)?
- This fund was instituted in 1948 by then Prime Minister Jawaharlal Nehru, to assist displaced persons from Pakistan. The fund is currently used primarily to tackle natural calamities like floods, cyclones and earthquakes. The fund is also used to help with medical treatment like kidney transplantation, cancer treatment and acid attack.
- The fund consists entirely of public contributions and does not get any budgetary support. It accepts voluntary contributions from Individuals, Organizations, Trusts, Companies and Institutions etc.
- The corpus of the fund is also invested in various forms with scheduled commercial banks and other agencies. Disbursements are made with the approval of the Prime Minister.
- The fund is recognized as a Trust under the Income Tax Act and the same is managed by the Prime Minister or multiple delegates for national causes.
- Contributions towards PMNRF are notified for 100% deduction from taxable income under section 80(G) of the Income Tax Act, 1961.