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Whether disbursal of funds by a company to the implementing agency for the implementation of projects will be considered as spend under section 135(5) and rules made there under?
Section 135(5) of the Act prescribes minimum spending obligation for the company. The company may fulfil its CSR spending obligation directly by itself or though engaging an implementing agency. The i...
Posted on: 3 years ago
Will the penal proceedings apply even after the unspent amount has been transferred to the Unspent CSR Account or to the funds mentioned in Schedule VII of the Act?
The penalty does not relieve the company from the obligations under the law, and the penalty is over and above the obligated amount required to be transferred under section 135(5) or 135(6). The penal...
Posted on: 3 years ago
Can funds earmarked for one project be used for another project?
Yes, the budget outlay dedicated for one project can be used against another project. In such a case, the Board and CSR Committee should appropriately record the alteration in the target spending and...
Posted on: 3 years ago
Whether the companies can undertake any CSR activity mentioned under Schedule VII of the Act for the exclusive benefit of their employees, workers and their family members?
Rule 2(1)(d)(iv) of the Companies (CSR Policy) Rules, 2014 states that any activity benefitting employees of the company shall not be considered as eligible CSR activity. As per the rule, any activity...
Posted on: 3 years ago
Which are the funds specified in Schedule VII of the Act for the purpose of CSR contribution?
Contributions to the following funds shall be admissible as CSR expenditure: (i) Swachh Bharat Kosh (ii) Clean Ganga Fund (iii) Prime Minister’s National Relief Fund (PMNRF) (iv) Prime Minister’s...
Posted on: 3 years ago
What are the different modes of incurring CSR expenditure?
CSR expenditure can be incurred in multiple modes‘Activities route’, which is a direct mode wherein a company undertakes the CSR projects or programmes as per Schedule VII of the Act, either by itself...
Posted on: 3 years ago
Can CSR expenditure be incurred on activities beyond Schedule VII?
No, CSR expenditure cannot be incurred on activities beyond Schedule VII of the Act. The activities undertaken in pursuance of the CSR policy must be relatable to Schedule VII of the Companies Act, 20...
Posted on: 3 years ago
Whether contribution in kind can be monetized to be shown as CSR expenditure?
The requirement comes from section 135(5) that states that “The Board of every company shall ensure that it spends…” Therefore, CSR contribution cannot be in kind and monetized.
Posted on: 3 years ago
What tax benefits can be availed under CSR?
No specific tax exemptions have been extended to CSR expenditure. The Finance Act, 2014 also clarifies that expenditure on CSR does not form part of business expenditure.
Posted on: 3 years ago
Whether CSR expenditure of a company can be claimed as a business expenditure?
No, the amount spent by a company towards CSR cannot be claimed as business expenditure. Explanation 2 to section 37(1) of the Income Tax Act, 1961 which was inserted through the Finance Act, 2014 pro...
Posted on: 3 years ago