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Csr expense

07 September 2011

Can anyone tell me whether Corporate Social Responsibility(CSR) Expense incurred by a company is deductible expense or not as per Income Tax Act. Thank you

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5 Replies

CA Ankur Goel (sr. executive) (133 Points)
Replied 10 September 2011

In my opinion , it should be deductable.

being as a company, it should incurred corporate social responsibility expenses.

that why these exps. have business nature.

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Ashvin Bhanderi (ACCOUNTANT) (59 Points)
Replied 10 September 2011

YES.. IT IS DEDUCTIBLE

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(Guest)

Corporate social responsibility (CSR, also called corporate conscience, corporate citizenship, social performance, or sustainable responsible business) is a form ofcorporate self-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. The goal of CSR is to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. Furthermore, CSR-focused businesses would proactivelypromote the public interest(PI) by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality. CSR is the deliberate inclusion of PI into corporate decision-making, that is the core business of the company or firm, and the honouring of a triple bottom line: people, planet, profit.

Relevant section to claim deduction shall be S 35AC; 35CCA; 35CCB and 37.

read the above sections to know the eligibility of deduction under CSR

https://taxbykk.blogspot.com/

2 Like

shibendu banerjee (student) (62 Points)
Replied 10 September 2011

Thanks a lot to CA Ankur Goyel, Mr. Ashvin Bhanderi & Mr Kaushal

So can we say that as every company has some social responsibility to develop our society, for that reason CSR expenses, incurred by a company, should be deductible U/S 37 of Income Tax Act ??

And another thing is that if a company financially helps a poor girl student to complete her higher study... can we say that it is a CSR expense incurred by the company.

Thanks a lot to u all again.

Ankush Nishan (student) (21 Points)
Replied 05 March 2014

Basis for Disallowance

Essence for deductibility under section 37 -Expenditure must be incurred wholly and exclusively for the purpose of business of taxpayer
CSR expense which is not connected with taxpayer’s business would not meet this condition