The Ministry of Finance is seriously considering the proposal made by the corporates for allowing the tax rebate to the corporate houses for the expenditure they have to make on the Social Welfare Schemes to be made as a part of their Corporate Social Responsibility (CSR).
While the ministry had earlier opposed the idea of allowing such expenditure but now it seems to rethink over the subject matter and to bring out a positive outcome in the upcoming budget, thereby providing deduction.
The Companies Act requires the companies to spend at least two percent of the three year average annual net profits towards CSR. This expenditure made by the companies shall thus, be provided as an allowable expenditure to provide as an incentive to carry out such works.On the other hand if the company does not spend such sum then the company has to explain the reasons for not doing so.
