Companies (Corporate Social Responsibility Policy) Amendment Rules, 2022 applicable with effect from 20th September 2022
Applicability of CSR provisions under the Companies Act 2013
Section 135 of Companies Act 2013, read with Companies (Corporate Social Responsibility) Rules, 2014, and schedule VII prescribes mandatory provisions for Companies to fulfill their CSR.
As per Section 135 (1) of the Companies Act 2013,
Every Company having:
- Net worth – Rs 500 crores or more, or
- Turnover – Rs 1000 crores or more, or
- Net profit – Rs 5 crores or more
Shall spend at least 2 % of the average net profit of the company made during the three immediately preceding financial years.
MCA vide its notification dated September 20, 2022, has made amendments to the Companies (Corporate Social Responsibility Policy) Rules, 2014 (“Rules”).
| SL No. | Previous Provisions | Amended Provisions |
| 1. | Constitution of CSR Committee: It is Mandatory for those companies for which the amount to be spent for CSR Activities exceeds Rs 50 Lakhs. | Constitution of CSR Committee: It is now mandatory for companies with any amount in their “unspent CSR account” in terms of ongoing projects under 135(6) of the Companies Act 2013.
(Proviso inserted after Rule 3 (1)). |
| 2. | CSR implementing agencies undertaking CSR Activities – only those registered under Section 12A and approved 80 G of the Income Tax Act. | CSR implementing agencies undertaking CSR Activities – through registered public trust/society which is exempt under Section (iv), (v), (vi) or (via) of clause (23C) of section 10 or registered under Section 12 A and approved under 80 G of Income Tax Act. |
| 3. | Expenditure on impact assessments reports – 5% of expenditure or 50 lakhs whichever is lower. | Expenditure on impact assessments reports – 2% of expenditure or 50 lakhs whichever is higher. |
Revised Format of annual report on CSR :
The format of the Annual Report on CSR is also revised. The earlier format was quite elaborate. The same has been now rationalized by omitting the requirement of mentioning the details of each project (ongoing and others). The revised format is available on the MCA website.
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