CSR eligibility to be reckoned from previous 3 financial years

A query was being raised in the industry whether for calculating the eligibility limits for CSR, Financials for FY 2013-14 are to taken into account or financials tor FY 2014-15 into account.

Please see the below circular issued by MCA, which clarifies that:

(v). “Any financial year” referred under Sub-Section (1) of Section 135 of the Act read with Rule 3(2) of Companies CSR Rule, 2014, implies ‘any of the three preceding financial years’.

This means that if in the preceding 3 financial years, the Company crosses any of the thresholds as defined under section 135 i.e.

1. net worth of rupees five hundred crore or more,

2. or turnover of rupees one thousand crore or more or

3. a net profit of rupees five crore or more during any financial year

then CSR will be applicable to the Company and the Company will be required to spend in FY 2014-15 or explain  in the Board™s report.

The circular can be accessed at the link below.

General Circular No. 21/2014. Clarifications with regard to provisions of Corporate Social Responsibility under section 135 of the Companies Act, 2013. 


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