Tax Incentives likely for Swachh Bharat, Clean Ganga initiatives in the Budget 2015

Finance Minister is likely to provide tax incentives in Budget to encourage companies to participate in Swachh Bharat Abhiyan and Clean Ganga campaign as part of mandatory two per cent CSR spending.

“The Ministry is working on tax incentives for these two major schemes of the Narendra Modi government and some announcements are likely in the Budget.

Jaitley is scheduled to present his first full fledged Budget on February 28.

India Incorporation has been demanding that CSR spending be allowed as deduction .

Currently contributions to Prime Minister’s National Relief Fund is allowed as 100 per cent deduction.

Under the Companies Act, the companies are required to spend 2 per cent of their net profit on Corporate Social Responsibility (CSR) activities. But the Income Tax Act does not provide for any incentives for such expenditure.

The companies are also required to disclose the CSR activities and the amount spent on it in their annual reports.

The Budget for 2014-15 has clarified that the expenditure incurred on CSR activities is not for the purpose of business and hence cannot be allowed as deduction for computing the tax liability of the company.

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