Corporate Social Responsibility: Calculation & Filing under Section 135 of Companies Act, 2013
Corporate Social Responsibility (CSR) is a big deal in India. It’s the government’s way of ensuring that profitable businesses contribute to the well-being of the society that helps them succeed. If your company’s finances have recently crossed a certain threshold, you’ve officially entered the world of CSR. Here’s a simple, human-friendly guide to what you need to do and, most importantly, when to do it.
The Trigger: Why This Matters to You
Your company is now subject to the CSR rules because its net profit exceeded ₹5 crore in the financial year 2023-24. This is the key trigger that starts your CSR journey. Congratulations—or maybe, get ready for some paperwork!
1. Your CSR Spending: The “What” and “When”
The spending obligation doesn’t apply to the year you became eligible. Instead, it kicks in for the very next financial year.
- Your Spending Period: You’re required to spend a certain amount on social activities during the financial year 2024-25.
- The Calculation: The amount you must spend is 2% of the average net profit from the three financial years that came before the spending period (i.e., FY 2021-22, FY 2022-23, and FY 2023-24).
- Your Spending Deadline: All CSR projects and activities for this period must be completed and the funds spent by March 31, 2025.
2. The Reporting: Filing Form CSR-2
Reporting your CSR activities is just as crucial as doing them. This is done through a mandatory form called CSR-2, which is filed with the Ministry of Corporate Affairs (MCA). It’s your company’s official CSR report card.
- The Deadline: You must file Form CSR-2 as an addendum to your company’s annual financial statement filing, Form AOC-4. For the financial year 2023-24 (the year you became eligible), the deadline for this filing has been extended.
- The Date You Need to Know: The deadline for filing Form CSR-2 for FY 2023-24 is June 30, 2025.
Putting It All Together: Your CSR Checklist
Let’s summarize the key dates for your company to make sure you stay on track:
- Financial Year 2023-24: Your company’s profit crosses the ₹5 crore mark. This is the moment you become CSR-eligible.
- Deadline for Form CSR-2 (for FY 2023-24): June 30, 2025. This is your very first CSR-related filing.
- Financial Year 2024-25: This is the first year you have a mandatory CSR spending obligation. You must calculate 2% of your average net profit from the last three years and spend that amount on CSR projects.
- Deadline for Spending (for FY 2024-25): March 31, 2025. All your spending for this period should be completed by this date.
By keeping these dates and rules in mind, your company can navigate its new CSR responsibilities smoothly and showcase its commitment to making a positive impact.
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Contact NIRA Associates via mobile +918588900433 or email csniraassociates@gmail.com for getting your CSR provisions complied with.
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