Corporate social responsibility (csr)

If M/s XYZ Pvt. Ltd. has Profit before tax as under:

FY 2015-16: 1 Cr

FY 2016-17: 3 Cr

FY 2017-18: 6 Cr

Whether, the provisions of CSR activities (Section 135) will be made applicable in FY 2017-18 or have to fulfill in FY 2018-19? That is to say, 2% of the average Net Profit of 3 immediately preceding financial years has to be spent in FY 2017-18 itself?

Replies (5)
In 2018 *19 spend by 20lks
1&2[135. [1] 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 3[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.

Hi,

in your case If you go through act as per section 135 - applicable only if 5 crores or more net profit, you have mentioned profit before tax but such 5 crore limit based on profit after tax. according to FAQ calculation for net profit- average 2% net profit of  3 immediately preceding FY(this 2% net profit is  profit before tax )

average profit of the last 3 years is 3 crores..no need of csr expenditure.

Hey, average profit of last 3 years is only to calculate contribution not for applicability check.

you have to ensure about last year's net profit is whether 5 crores or more for applicability.

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