Dear All,
Sec 135 (1) of Companies Act 2013 states that 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 any financial year shall constitute a Corporate Social Responsibility Committee of the Board....
Explanation.—For the purposes of this section “average net profit” shall be calculated in accordance with the provisions of section 198. ]
Further Sec 198 (5)(a) says that any Income tax and super tax payable by the Company shall not be deducted while computing the said profits.
My queries are:
a) if PBT is Rs. 6 crores and after deducting Income tax to be paid it is around Rs. 4 crores, is CSR applicable? In my opinion it is.
b) For calculation of 2% of average net profits of preceeding 3 years, i have to take the respective year's PBT into consideration or PAT will be considered?
Thanks in advance.
CAclubindia
