CSR expenditure may be made tax deductible, says committee

  1. Government had formed a High Level Committee on Corporate social responsibility(CSR) under the Chairmanship of Corporate Affairs Secretary Injeti Srinivas.
  2. The committee was formed to review the existing CSR framework and make recommendations on strengthening the CSR ecosystem including monitoring implementation and evaluation of outcomes.
  3. The committee has recommended that CSR expenditure should be eligible for tax deduction under the income tax law.Currently,income tax law does not allow CSR spends as tax deductible amount.
  4. The committee has also suggested to align Schedule 7 of the Companies Act which outlines the kinds of activities that qualify as CSR with the United Nations Sustainable Development Goals.
  5. The committee has also recommended a provision to carry forward of unspent CSR balance for a period of three to five years.It has also said that CSR should not be used as a means of resource-gap funding for government schemes.
  6. The other key points of the suggestions were balancing local area preferences with national priorities when it comes to CSR and also introducing impact assessment studies for CSR obligations of ₹5 crore or more.
  7. The report has also recommended the registration of implementation agencies on the Ministry of Corporate Affairs(MCA) portal.
  8. Corporate social responsibility(CSR) was initiated through the Companies Act, 2013.The act mandated companies and government organisations with (a)turnover of Rs1,000 crore or more(b)net worth exceeding Rs 500crore or (c)having more than Rs 5 crore in net profits,to set aside 2% of their average net profits for CSR activities.