Does the Corporate Social Responsibility (CSR) law apply to your company ?

What is CSR?

The Companies Act, 2013, envisioned that the private sector can contribute towards achieving the listed sustainable and henceforth, nation-building goals. With that, India is also the first country in the world to make corporate social responsibility mandatory. for more details....

If a company falls under the ambit of the Corporate Social Responsibility (CSR) law, it shall invest at least 2 percent of its average net profits in projects in the field of education, water supply, health care, environment, social empowerment, sports, culture, through a registered trust, a registered society or a non-profit (section 8) firm.

Is Corporate Social Responsibility (CSR) applicable to your company?

Yes if during the financial year your company has:

• a net worth of Rs. 500 crores or more or,
• a turnover of Rs. 1,000 crores or more or,
• a net profit of Rs. 5 crores or more.

Corporate Social Responsibility is often considered as a means of charity or donations. In practice, it is a successful approach for companies to engage themselves in activities that help society at large. Corporate Social Responsibility is a way of achieving a balance between profitable activities and social development.

How mandatory is the law?

In 2019, an amendment made the Corporate Social Responsibility (CSR) norms in India stricter. It is now mandatory that the unspent CSR money in a financial year be transferred to an escrow account specially meant for CSR activities. These remaining funds must be used within three years. Later, any unspent amount must be transferred to a government-specified fund.

Non-compliance of the law shall entitle both the company and the entrusted individuals with fines ranging from Rs. 50,000 to Rs. 25 lakhs. The amendment also makes the defaulters liable for imprisonment up to 3 years.

Know more about corporate social responsibility in India on the National CSR Portal of the Government of India.click here....