13 September 2017
As per Section 135 (1) of Companies Act, 2013 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 consisting of three or more directors, out of which at least one director shall be an independent director.
Question- whether the net profit which is mentioned above under section 135(1) is Net Profit after tax or Net Profit Before tax? Because Nowhere in Companies act, 2013 it is defined whether it is Net Profit Before Tax or Net profit After Tax.
Once ministry came out with General Circular No. 01/2016 No. 05/19/2015-CSR
And in the circular, it is defined in reference to Question-Whether the “average net profit” criteria for section 135(5) is Net Profit Before tax or Net Profit After Tax Answer- computation of net profit for section 135 is as per section 198 of the companies Act, 2013 which is primarily Profit Before tax.
SO I WANT TO KNOW FOR CSR APPLICABILITY UNDER SECTION 135(1) WE HAVE TO CONSIDER NET PROFIT AFTER TAX OR NET PROFIT BEFORE TAX?
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