Sunny (CA Business) (401 Points)
21 September 2018If 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?
Ankush khurana
(91 Points)
Replied 09 October 2018
Bhaskar Bhat
(CS Professional)
(81 Points)
Replied 09 October 2018
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 )
Ashwin Kumar
(1234 Points)
Replied 10 October 2018
average profit of the last 3 years is 3 crores..no need of csr expenditure.
Bhaskar Bhat
(CS Professional)
(81 Points)
Replied 11 October 2018
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.
CAclubindia
