Corporate social responsibility

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 January 2015 Case - A ltd. having net profit of more than Rs. 5 Crores and it is liable to spend 2% of its avg net profit of past 3 years towards CSR activities. But its profit is not in liquidity form. Can company take a loan from bank in its name to carry out CSR activities???
If Yes, what will be the consequences under companies act,2013. will it be considered as expenses towards CSR activities???

Amol S Joglekar

Amol S Joglekar (Expert)
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15 January 2015 CSR is basically a spontaneous responsibility. Since companies were reluctant to do its spoantaneous responsibility, it got its place in ACT. Now when, Act specifies certain things....the LOAN taken for carrying out the same amounts to BUSINESS purpose loan and the expenditure e.g. bank interest is deductible expenses under income tax.

Querist : Anonymous

Querist : Anonymous (Querist)

15 January 2015 But I want to know that whether company can take loan from Bank specifically for CSR activities?

Amol S Joglekar

Amol S Joglekar (Expert)
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15 January 2015 Of course YES....
The Banks as such Do not have any scheme to finance the CSR expenses, in particular...
And that is why I was trying to tell you that business loan can be opted for

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