The ‘Memorandum to Finance Bill 2014’ had also clarified that this initiative (mandating CSR) is primarily to ensure that companies share the burden of providing social services and granting deduction for CSR expenditure would amount to the Government effectively bearing one third of that expenditure. However, CSR expenditure which is allowed as deduction under other sections shall be permissible. The Finance Act, 2014 also clarifies that expenditure on CSR does not form part of business expenditure.įinance Act 2014 (2014-15 was fiscal year from which CSR was made mandatory u/s 135 of the Indian Companies Act 2013) had made it clear that “CSR Expenditure” shall not be allowed as “Business Expenditure” under section 37 of Income Tax Act, 1961. MCA’s Answer: No specific tax exemptions have been extended to CSR expenditure.
In this circular MCA has answered various Frequently Asked Questions (FAQ).įAQ 3.11: What tax benefits can be availed under CSR? The question whether contributions made under CSR are eligible for deduction u/s 80G of Income tax 1961 or not, is compounded further by The Ministry of Corporate Affairs (MCA) General Circular No. We continue to receive a lot of queries from companies and CSR Implementing NGOs whether contributions made under CSR are eligible for deduction u/s 80G of Income tax 1961 or not? In this Blog Post we shall attempt to answer this question in light of the Income Tax Act, the intent of legislature and a relatively recent order of ITAT Bangalore.
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