As per explanation to section 135(5) of the Act, “net profit” shall not include such sums as may be prescribed and it shall be calculated in accordance with the provisions of section 198 of the Act. As per rule 2(h) of CSR Rules, “Net profit” means the net profit of a company as per its financial statement prepared in accordance with the applicable provisions of the Act, but shall not include the following: (i) any profit arising from any overseas branch or branches of the company, whether operated as a separate company or otherwise; and (ii) any dividend received from other companies in India, which are covered under and complying with the provisions of section 135 of the Ac.
Thus if the company receive Dividend from its foreign subsidiary company, Do it needs to pay CSR on such dividend amount?
CAclubindia
