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CSR Expenditure

Savio V Simon (Student CS) (219 Points)

29 November 2017

Is CSR Expenditure can be shown as expense of the Company and can debit in the profit and loss account??

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10 Replies

Neha Mittal (240 Points)
Replied 29 November 2017

no bcz such expense is not for company operations but company can claim deduction

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Sunil Ahmad (Student) (1511 Points)
Replied 29 November 2017

Expenditure on CSR is allowable as business expenditure

Savio V Simon (Student CS) (219 Points)
Replied 29 November 2017

Thank u
But how it can shown in financial statement !! it is after tax or before tax??

Neha Mittal (240 Points)
Replied 29 November 2017

@ sunilahmad it will not be allowed as business expenditure at all.

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Sunil Ahmad (Student) (1511 Points)
Replied 29 November 2017

I too know but the admissibility of CSR expenditure as business expenditure under section 37 was not clear due to differing Court rulings.

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Sunil Ahmad (Student) (1511 Points)
Replied 29 November 2017

expenditure spent on CSR will be allowed under the Income-tax Act for the company will depend upon the nature of expenditure itself.In most of the cases which are not falling under the revenue expenditure, the Income Tax Officer will disallow these expenses.The company which is covered under the CSR Rules, will have to analyse whether the expenditure to be incurred will be done in a tax efficient manner.

Neha Mittal (240 Points)
Replied 29 November 2017

nature of expenditure is irrelevant. csr expenditure is not for business operations and only expenses incurred in relation to business is allowed.
however, @ saviovsimon can claim deduction.

1 Like

Rahul Khanna (Company Secretary) (29 Points)
Replied 29 November 2017

refer faq on csr mca

prasad Nilugal ( GST Practitioner & Accounts ) (14644 Points)
Replied 29 November 2017

able to Compute Net Profit for CSR contribution as per Section 198 of Companies Act, 2013

	Particulars	FY

	Net profit after tax*

Add :	Allowed Credits
1	Profit on sale of immovable property
	( Original Cost – WDV )

Less :	Credits Disallowed
1	Premium on shares or debentures
2	Profit on sale of forfeited shares
3	Profit on sale of immovable property
	(Sale Value of Immovable Property – Original Cost )
4	Surplus in P&L on measurement of asset or liability at fair value

Less :	Expenses Allowed
1	All the usual Working Charges
2	Director’s Remuneration
3	Bonus or Commission paid to Staff
4	Tax on escess or abnormal profits
5	Tax on business profits imposed for special reasons
6	Interest on Debentures
7	Interest on Loans
8	Expenses on repairs ( other than Capital Expenditure )
9	Contributions made under section 181 ( Bonafide Charitable Trusts )
10	Depreciation
11	Prior period items
12	Legal liability for compensation or damages
13	Insurance Expenses

Add :	Expenses Disallowed
1	Income Tax
2	Compensations, damages or payments made voluntarily
3	Capital Loss on sale of undertaking or part thereof ( Not include losses on sale of asset )
4	Expenditure in P&L on measurement of asset or liability at fair value


	Net profit after tax is taken as base and accordingly the adjustments need to be considered.*