Suyog S Kabra
According to estimates given by E&Y ,the new regulation of CSR will cover 3,000 companies and result in about more than $2 billion expenditure on social initiative in India. While Government estimated expenditure under social service head for 2014-15,which include health, education etc amount to $4.10 billion alone while estimated CSR spending of $2 billion itself indicate that CSR becoming strong catalyst in India’s social upliftment process.
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Dear All, Request you to suggest/refer us the name of the trust / societies registered under he income tax act with which we can spend towards the CSR activities and could be able to get the (100% ) deduction under Income Tax Act .
The expenses which are covered u/s 37 is allowable expenditure if it is incurred wholly and exclusively for the purpose of business.It becomes complex with addition of explanation 2 to sec 37 .The company can argue a particular expenditure say payment/grant to a hospital maintained by the company to be covered u/s 37(hospital is separate entity but arrangement is such that it is maintained by company).Another interpretation may be that since Hospital is separate entity and payment to such hospital covered by CSR activities and hit by explanation 2 though the expenses were incurred on the employees as a part of statutory obligation.My view is that explanation 2 will be applicable in those cases where it is not for the benefits of its employees directly but in the nature of CSR.
My query is once these donations are treated as CSR where is the question of allowing them under 80G , 35AC or 35CCD. The SC in the case of britannia has held that once guest house expenses are disallowed u/s 37 (which was prevailing at that time) then rent, repiars incurred on the guest house cannot be allowed u/s 30. If that be the case the department may argue all these donations form part of CSR only and hence they will not be allowed. If they allow it defeats the purpose for which CSR disallowance was introudcued in the act. so there will be a legal battle for sure. The best thing is to allow CSR