Corporate Social Responsibility
India is the first country in the world to make corporate social responsibility (CSR) mandatory, following an amendment to the Companies Act, 2013, in April 2014. Businesses can invest their profits in areas such as education, poverty, gender equality, and hunger as part of any CSR compliance.
The amendment notified in Companies Act, 2013 requires companies with a net worth of INR 500 crore or more, or an annual turnover of INR 1000 crore or more, or net profit of INR 5 crore or more, to spend 2% of their average net profits of three years on CSR.
Prior to that, the CSR clause was voluntary for companies, though it was mandatory to disclose their CSR spending to shareholders. CSR includes but is not limited to the following:
- Projects related to activities specified in the Companies Act; or
- Projects related to activities taken by the company board as recommended by the CSR Committee, provided those activities cover items listed in the Companies Act.
Businesses must note that the expenses towards CSR are not eligible for deduction in the computation of Taxable Income. The government, however, is considering a re-evaluation of this provision, as well as other CSR provisions recently introduced under the Companies (Amendment) Act, 2019.
Any contribution from CSR Fund to Political Parties (Like Public Political party; PPP; www.publicpoliticalparty.com ) shall not come under CSR Activities.
Public Political Party 