CSR is a perspective that showcases and works on an overwhelming concern for the disadvantaged and marginalized sections of the society.

Is a approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders in a business

While there may be no single universally accepted definition of CSR, each definition that currently exists underpins the impact that businesses have on society at large and the societal expectations of them.

There exists an ever-growing inequality, disparity and a clearly visible divide. Hence, the need of the hour is a multidimensional view of poverty and human deprivation, today the focus must be on our fundamental right, the right to live a dignified life.

Historically, the Philanthropy of Indian business community is deeply rooted in religious belief. The business case refers to the ethics, that the true purpose of business should include interest of employees as well the society as a whole.

To promote afore said belief, India is amongst the first few countries in the world to make Corporate Social Responsibility (CSR) mandatory, following an amendment to The Companies Act, 2013 in April 2014.

Company can invest a small portion (2-3%) of their net profits, following certain guideline, in areas such as education, poverty, gender, equality and other prescribed by Government of India.

Company can invest a small portion (2-3%) of their net profits, following certain guideline, in areas such as education, poverty, gender, equality and other prescribed by Government of India.

While there may be no single universally accepted definition of CSR, each definition that currently exists underpins the concept of charity towards rural and destitute India. For section 135 and certain basic guidelines read more .

The Trust’s vision that charity begins from home –thus aims at initial seed funding from family, friends and community; but for sustainable sources of funds, the participation of CRS will be the Lifeline for our mission.

CSR money participation by eligible companies in FY 2014-15 was INR 8606 crore ($1.324 Billion) and INR 9309 crore in FY 2015-16 ($ 1.432 Billion). [$1=INR 65]

The Board of every company referred to in sub-section (1), shall ensure that the company spends, in every financial year, at least two per cent. of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy:

• Provided that the company shall give preference to the local area and areas around it where it operates, for spending the amount earmarked for Corporate Social Responsibility activities:
• Provided further that if the company fails to spend such amount, the Board shall, in its report made under clause (o) of sub-section (3) of section 134, specify the reasons for not spending the amount.
• Explanation. – For the purposes of this section “net profit” shall not include such sums as may be prescribed, and shall be calculated in accordance with the provisions of section 198.

80G: Donors are eligible for a tax exemption on the amount donated (depending upon the annual income of the donor and other variations.) The institution can get an exemption of 10% for the gross income earned through donations and contributions.

• 35AC: Deduction is available under section 35 ac at 100% of the amount contributed from the taxable income of the assesse under the head profits and gains of business or profession for promoting the social and economic welfare or upliftment of the public.
• 12 A: Registration is one time exemption obtained by Trusts, right after incorporation to be exempted from paying income tax.
• TAN: Tax Deduction Account Number
• FCRA: Foreign Contribution Regulations Act (FCRA): Eligibility to receive donation from outside India towards the foreign fundraising

• Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during the immediately preceding financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director.
  Provided that where a company is not required to appoint an independent director under sub-section (4) of section 149, it shall have in its Corporate Social Responsibility Committee two or more directors.
• The Board’s report under sub-section (3) of section 134 shall disclose the composition of the Corporate Social Responsibility Committee.
• The Corporate Social Responsibility Committee shall,-
• Formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company in areas or subject, specified in Schedule VII;
• Recommend the amount of expenditure to be incurred on the activities referred to in clause (a); and
• Monitor the Corporate Social Responsibility Policy of the company from time to time.
• The Board of every company referred to in sub-section (1) shall,—
• After taking into account the recommendations made by the Corporate Social Responsibility Committee, approve the Corporate Social Responsibility Policy for the company and disclose contents of such Policy in its report and also place it on the company’s website, if any, in such manner as may be prescribed; and
• Ensure that the activities as are included in Corporate Social Responsibility Policy of the company are undertaken by the company.

A company has to spend at least 2% of last 3 years average net profits on CSR activities.

• These provisions are not only applicable to Indian companies, but also applicable to branch and project offices of a foreign company in India.

Legal Mandate According To Companies Act 2013

For Companies with

• Net Worth of 500 Crore or more
• Annual Turnover of 1000 Crore or more
• Net Profit of 5 Crore or more

The Companies (Corporate Social Responsibility Policy) Rules, 2014

G.S.R. 129(E). – In exercise of the powers conferred under section 135 and sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules, namely:

1. Short Title and Commencement
   1. These rules may be called the Companies (Corporate Social Responsibility Policy) Rules, 2014.
   2. They shall come into force on the 1st day of April, 2014.

2. Definitions
   1. In these rules, unless the context otherwise requires
   2. “Act” means the Companies Act, 2013;
   3. “Annexure” means the Annexure appended to these rules;
   4. “Corporate Social Responsibility (CSR)” means and includes but is not limited to :-
   5. Projects or programs relating to activities specified in Schedule VII to the Act; or
   6. Projects or programs relating to activities undertaken by the board of directors of a company (Board) in pursuance of recommendations of the CSR Committee of the Board as per declared CSR Policy of the company subject to the condition that such policy will cover subjects enumerated in Schedule VII of the Act.
   7. “CSR Committee” means the Corporate Social Responsibility Committee of the Board referred to in section 135 of the Act.
   8. “CSR Policy” relates to the activities to be undertaken by the company as specified in Schedule VII to the Act and the expenditure thereon, excluding activities undertaken in pursuance of normal course of business of a company;
   9. “Net profit” means the net profit of a company as per its financial statement prepared in accordance with the applicable provisions of the Act, but shall not include the following, namely:
   10. Any profit arising from any overseas branch or branches of the company, whether operated as a separate company or otherwise; and
   11. Any dividend received from other companies in India, which. Are covered under and complying with the provisions of section 135 of the Act:

Provided that net profit in respect of a financial year for which the relevant financial – statements were prepared in accordance with the provisions of the Companies Act, 1956 (1 to 1956) shall not be required to be re-calculated in accordance with the provisions of the Act:

Provided further that in case of a foreign company covered under these rules, net profit means the net profit of such company as per profit and loss account prepared in terms of clause (a) of sub-section (1) of section 381 read with section 198 of the Act.

2. Words and expressions used and not defined in these rules but defined in the Act shall have the same meanings respectively assigned to them in the Act.

3. Corporate Social Responsibility.
   1. Every company including its holding or subsidiary, and a foreign company defined under clause (42) of section 2 of the Act having its branch office or project office in India, which fulfills the criteria specified in sub-section (I) of section 135 of the Act shall comply with the provisions of section 135 of the Act and these rules:

Provided that net worth, turnover or net profit. of a foreign company of the Act shell be computed in accordance with balance sheet and. Profit and loss account of such company prepared in accordance .with the provisions of clause (a) of sub-section (1) of section 381 and section 198 of the Act

2. Every company which ceases to be a company covered under subsection (1) of section 135 of the Act for three consecutive financial years shall not be required to
3. Constitute a CSR Committee; and
4. Comply with the provisions contained in sub-section (2) to (5) of the said section, till such time it meets the criteria specified in sub-section (1) of section 135.

4. CSR Activities
   1. The CSR activities shall be undertaken by the company, as per its stated CSR Policy, as projects or programs or activities (either new or ongoing), excluding activities undertaken in pursuance of its normal course of business.
   2. The Board of a company may decide to undertake its CSR activities approved by the CSR Committee, through
   3. A company established under section 8 of the Act or a registered trust or a registered society, established by the company, either singly or along with any other company, or
   4. A company established under section 8 of the Act or a registered trust or a registered society, established by the Central Government or State Government or any entity established under an Act of Parliament or a State legislature:

Provided that – if, the Board of a company decides to undertake its CSR activities through a company established under section 8 of the Act or a registered trust or a registered society, other than those specified in this sub-rule, such company or trust or society shall have an established track record of three years in undertaking similar programs or projects; and the company has specified the projects or programs to be undertaken, the modalities of utilisation of funds of such projects and programs and the monitoring and reporting mechanism”.

3. A company may also collaborate with other companies for undertaking projects or programs or CSR activities in such a manner that the CSR Committees of respective companies are in a position to report separately on such projects or programs in accordance with these rules.
4. Subject to provisions of sub-section (5) of section 135 of the Act, the CSR projects or programs or activities undertaken in India only shall amount to CSR Expenditure.
5. The CSR projects or programs or activities that benefit only the employees of the company and their families shall not be considered as CSR activities in accordance with section 135 of the Act.
6. Companies may build CSR capacities of their own personnel as well as those of their Implementing agencies through Institutions with established track records of at least three financial years but such expenditure “including expenditure on administrative overheads,” shall not exceed five percent of total CSR expenditure of the company in one financial year.
7. Contribution of any amount directly or indirectly to any political party under section 182 of the Act, shall not be considered as CSR activity.

5. CSR Committees.
   1. The companies mentioned in the rule 3 shall constitute CSR Committee as under.
   2. An unlisted public company or a private company covered under subsection (1) of section 135 which is not required to appoint an independent director pursuant to sub-section (4) of section 149 of the Act, shall have its CSR Committee without such director ;
   3. A private company having only two directors on its Board shall constitute its CSR Committee with two such directors;
   4. With respect to a foreign company covered under these rules, the CSR Committee shall comprise of at least two persons of which one person shall be as specified under clause (d) of sub-section (1) of section 380 of the Act and another person shall be nominated by the foreign company.
   5. The CSR Committee shall institute a transparent monitoring mechanism for implementation of the CSR projects or programs or activities undertaken by the company.

6. CSR Policy
   1. The CSR Policy of the company shall, inter-alia, include the following namely:
   2. A list of CSR projects or programs which a company plans to undertake falling within the purview of the Schedule VII of the Act, specifying modalities of execution of such project or programs and implementation schedules for the same; and
   3. Monitoring process of such projects or programs:

Provided that the CSR activities does not include the activities undertaken in pursuance of normal course of business of a company.

Provided further that the Board of Directors shall ensure that activities included by a company in its Corporate Social Responsibility Policy are related to the activities included in Schedule VII of the Act.

2. The CSR Policy of the company shall specify that the surplus arising out of the CSR projects or programs or activities shall not form part of the business profit of a company.

7. CSR Expenditure

CSR expenditure shall include all expenditure including contribution to corpus, or on projects or programs relating to CSR activities approved by the Board on the recommendation of its CSR Committee, but does not include any expenditure on an item not in conformity or not in line with activities which fall within the purview of Schedule VII of the Act.

8. CSR Reporting
   1. The Board’s Report of a company covered under these rules pertaining to a financial year commencing on or after the 1st day of April, 2014 shall include an annual report on CSR containing particulars specified in Annexure.
   2. In case of a foreign company, the balance sheet filed under sub-clause (b) of sub-section (1) of section 381 shall contain an Annexure regarding report on CSR.

9. Display of CSR Activities on its Website

The Board of Directors of the company shall, after taking into account the recommendations of CSR Committee, approve the CSR Policy for the company and disclose contents of such policy in its report and the same shall be displayed on the company’s website, if any, as per the particulars specified in the Annexure.