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Joined March 2019
CSR expenses are provided at 2% on an average of three years profits. Fro example,
Year 1 PBT 10000
Year 2 PBT 20000
Year 3 PBT 10000
=40000/3*2%= 267₹ CSR expenditure. Some expenses are non tax deductible while others are. CSR Staff wages are included in this.
CSR expenses 167₹
CSR staff wages 100₹
To Payables 267₹
When expenses incurred are 167₹ only
Payables 167₹
To Cash a/c 167₹
The balance is transferred to profits back again as this past three years average PBT amount is deducted from current years PBT or reserves.
To Profit and loss 100₹
By gain (CSR activity) 100₹
This is because there is no clear accounting treatment available for money saved from CSR activity online.
No provision is required and over expenditures cannot be carried forward.