Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during the immediately preceding financial year] shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director.
[Provided that where a company is not required to appoint an independent director under sub-section (4) of section 149, it shall have in its Corporate Social Responsibility Committee two or more directors. (inserted Companies Amendment Act 2017)
The above said specified companies required to spend 2% average net profit of 3 preceding financial years (or where the company has not completed the period of three financial years since its incorporation, during such immediately preceding financial years], in pursuance of its Corporate Social Responsibility Policy.
Treatment of Unspent amount
1. If the unspent amount relates to an ongoing activity, (which is mentioned in the schedule vii) it should be transferred to a special account to be opened by the company in that behalf for that financial year in any scheduled bank to be called the Unspent Corporate Social Responsibility Account, within 30 days of the close of the financial year. and such amount shall be spent by the company within a period of three financial years from the date of such transfer, failing which, the company shall transfer the same to a Fund specified in Schedule VII, within a period of thirty days from the date of completion of the third financial year.
2. If the unspent amount is not relates to an ongoing activity, it should be transferred by the company to the fund specified in schedule vii, within a 6 months of the expiry of the Financial year.
Author Bio
We are spending CSR through a Notified Trust which was registered under 12A of IT act. For the year 20-21, there is an unspent amount of Rs. 6.00 Cr (aprx). Now my question is whether the Trust also need to open CSR unspent Account?
whether amount transfer by company to scheduled bank A/c open for Unspent Corporate Social Responsibility fund, is eligible for deduction as expense in P&L
sir can a company utilize those unspent amount in next year.
That is yet to be Notified
Your article will help the “CITIZENS” in and around the Polluting Cement Factories who don’t spend CSR Funds for the intended purposes.
CONGRATULATIONS.KEEP IT UP.
MAYAVAN GOPINATH
ADVOCATE
WHETHER AMOUNT OF CSR DONATED TO A CHARITABLE TRUST SATISFIES REQUIREMENT OF CSR. PLEASE REPLY IN BOTH CASES WHERE THE CHARITABLE TRUST IS CREATED BY THE TRUSTEE WHO IS DIRECTOR IN THAT COMPANY OR ALTERNATIVELY TO AN INDEPENDENT TRUST.