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Corporate social responsibility is a broad concept that can take many forms depending on the

Company and industry. CSR activities can help to form a stronger bond between employees and

corporations; boost morale. For a Company to be socially responsible, it first needs to be

accountable to itself and its shareholders. 

A Company that adopt CSR programs to grow their

business to the point where they can give back to society.

Every Company having a net worth of rupees 500 crores or more, or turnover of rupees 1000 crore

or more or a net profit of rupees 5 crores or more during the immediately preceding financial year

shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or

more directors.

The Board's report shall disclose the composition of the Corporate Social Responsibility

Committee. The Committee shall:-

(a) formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall

indicate the activities to be undertaken by the Company in areas as specified

(b) recommend the amount of expenditure to be incurred on the activities and

(c) monitor the Corporate Social Responsibility Policy of the Company from time to time.

The Company who are required to form CSR committee spends, in every financial year, at least 2%

of the average net profits of the Company made during the three immediately preceding financial


The consequence of Non- Compliance

The Company shall be punishable with fine which shall not be less than fifty thousand rupees

but which may extend to twenty-five lakh rupees and every officer of such Company who is in

default shall be punishable with imprISOnment for a term which may extend to three years or

with fine which shall not be less than fifty thousand rupees but which may extend to five lakh

rupees, or with both.

What all you get in Expert Consultancy

What all provisions are applicable to your Company may be discussed in detail or any specific

the query will be addressed in consultancy service which may include any one or more of:

● Applicability of CSR provisions on your organisation

● Calculations clarity on CSR amount

● Response to any notice from the prescribed authority

● Non-compliance consequences and how to overcome

● Clarity over the formation of a committee

● any specific query, if any

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FAQ - Frequently asked questions

What is CSR compliance?

Corporate Social Responsibility (CSR) is the integration of socially beneficial programs and practices into a corporation's business model and culture.

What is the meaning of ‘any financial year’ mentioned in Section 135 (1) of the Companies Act, 2013?

“Any Financial year” referred under Sub- Section (1) of Section 135 of the Act read with Rule 3(2) of Companies CSR Rule, 2014 implies any of the three preceding financial years ( may refer General Circular No. 21/2014, dated: 18.06.2014)

Whether the CSR expenditure of a company can be claimed as a business expenditure?

The amount spent by a company towards CSR cannot be claimed as business expenditure. The Finance Act, 2014 provides that any expenditure incurred by an assessee on the activities relating to corporate social responsibility referred to in section 135 of the Companies Act, 2013 shall not be deemed to be an expenditure incurred by the assessee for the purposes of the business or profession.

Can the Contribution to the Political party under Section 182 of the Act, be considered as CSR activity?


Can the CSR projects, programs or activities that benefit the employees and their families be considered as CSR activity?


Can the Company collaborate with other Company for projects or programs undertaken in CSR?

Yes, the Company can collaborate with other Company for undertaking projects or programs in such a manner that the CSR Committees of such Company can report separately.

Whether events such as marathons/awards/charitable contribution/ advertisement/sponsorships of TV programmes etc. would not be qualified as part of CSR expenditure?


Whether expenditure incurred by Foreign Holding Company for CSR activities in India will qualify as CSR spend of the Indian subsidiary?

Yes, if, the CSR expenditures are routed through Indian subsidiaries and if the Indian subsidiary is required to do so as per section 135 of the Act.

Whether profit arising from a surplus of CSR activity form part of the profit of the Company?

No, the surplus arising out of the projects or programmes or activities shall not form part of the business profit of a Company.