The
Companies Act, 2013 requires every company fulfilling the prescribed criterion
of Corporate Social Responsibility (CSR); to spend in every financial year at
least 2% of the average net profits made during 3 preceding financial year for
CSR.
Ministry
of Corporate Affairs has issued Frequently Asked Questions (FAQs) dated 12th
January 2016 vide General Circular no 01/2016 clarifying doubts raised by
stakeholders related to CSR provisions. With these FAQs, matters such as the phrase ‘any financial year’, CSR can be
claimed as business expenditure or not, Tax exemptions available or not,
and the like. FAQs have also clarified
the role of Govt. in monitoring CSR implementation and utilization of CSR funds
for funding Govt. schemes.
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