The Ministry of Corporate Affairs has clarified that excess Corporate Social Responsibility (CSR) expenditure prior to FY21 cannot be set off against future CSR expenditure requirements and that corporate donations to government schemes cannot be counted as CSR.
Daily Current Affairs Quiz 2021
Companies with a minimum net worth of Rs 500 crore, turnover of Rs 1,000 crore, or net profit of Rs 5 crore are required to spend at least 2 per cent of their average profit for the previous three years on CSR activities every year.
The ministry has clarified that any CSR expenditure in excess of the mandated 2 per cent expenditure can be set off against mandatory CSR expenditure in the three subsequent fiscals.
Notably however, excess expenditure prior to FY21 is not eligible to be set off against future CSR requirements. The government had in May notified that donations made to the PM CARES fund on March 31, 2020 in excess of CSR requirements could be set off against CSR expenditure requirements for FY21.
