Corp affairs min's detailed FAQs on CSR likely by August
May 25 2014 , New Delhi
In a first of its kind, certain class of profitable companies are required to shell out at least two per cent of their three-year annual average net profit towards Corporate Social Responsibility (CSR) activities. The new rules, under the companies law, has come into effect from April 1.
"We expect to come out with a detailed set of FAQs on CSR activities by end of July or August," an official said.
The FAQs would help the companies to have more clarity on implementation of CSR norms and it would put up on the Ministry website, official added.
It would be prepared after compiling queries from various quarters, including companies and industry chambers.
Under the Companies Act, 2013, CSR rules would be applicable to corporates having at least Rs 5 crore net profit, or Rs 1,000 crore turnover or Rs 500 crore net worth.
Such companies would need to spend two per cent of their three-year average annual net profit on CSR activities in each financial year, beginning 2014-15 fiscal. In case, they are unable to spend the required amount, reasons for the same have to be given to the Ministry.
Even though the CSR rules have come into effect, many stakeholders are still seeking clarification on various aspects.
Meanwhile, the new government would take the final call on possible tax benefits for social welfare spending by companies.
The Corporate Affairs Ministry had written to the Finance Ministry pitching for tax benefits on CSR. Industry is anticipating tax benefits for social welfare spending.
Livelihood enhancement and rural development projects, working towards protection of national heritage, art and culture, including restoration of buildings and sites of historical importance and works of art, setting up public libraries, promotion and development of traditional arts and handicrafts, would be considered as CSR activities.
Works aimed at reducing inequalities faced by socially and economically backward groups, measures for the benefit of armed forces veterans, war widows and their dependents, setting up homes and hostels for women and orphans, setting up of old age homes, day care centres and such other facilities for senior citizens, among others, have also been included under the CSR ambit.