RSM India

White Paper - Legal, Taxation and FInancial Reporting Aspects of Corporate Social Responsibility (CSR)

With CSR becoming mandatory for Companies under the Companies Act, 2013, and also with various clarifications announced by the Ministry of Corporate Affairs for doing CSR in wake of Covid-19, we have in the attached white paper, tried to cover the regulatory, taxation and financial reporting aspects, pertaining to CSR so that corporates can align their charitable work to  also fall within the purview of CSR and take benefit of the same.

The following is the broad outline of the coverage in the enclosed white paper:

  • THE CSR REGUALTIONS WHICH ARE TO BE ALWAYS COMPLIED BY ANY COMPANY TO WHICH THE CSR SPEND IS APPLICABLE
  • Applicability of Corporate Social Responsibility (CSR)
  • Corporate Social Responsibility Committee (CSRC)
  • Amount to be allocated to CSR
  • Net Profits
  • Modalities of Performing CSR Activities
  • Discontinuation of CSR
  • Functions of the Board
  • Disclosures
  • CSR DURING COVID-19
  • Spending on relief activities related to COVID-19: Eligible CSR spend
  • In view of the recent outbreak of COVID 19, corporates can also spend their CSR funds on certain eligible CSR activities
  • Contribution to PM CARES FUND : Eligible CSR spend
  • MCA has also issued a FAQs on what would be considered as CSR pursuant to the outbreak of Covid-19
  • PROPOSED CHANGES IN THE CSR REGULATIONS:
  • Taxation for CSR in times of COVID-19
  • Allowability of expenditure incurred for CSR
  • Donations to PM CARES FUND eligible for 100% deduction
  • 80G Benefit available for FY 2019-20, even if opted for New Regime in FY 2020-21
  • Allowability of expenditure where assessee is not required to comply with CSR norms or where the expenditure are not considered as CSR for the purpose of section 135 of the Companies Act, 2013
  • Deduction under section 80G of the IT Act in addition to section 37 of IT Act
  • FINANCIAL REPORTING OF CSR AS PER THE APPLICABLE ACCOUNTING STANDARDS

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