The Ministry of Corporate Affairs (MCA) has released the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2022.
Salient amendments
- The businesses having any amount in its ‘unspent corporate social responsibility account’ should set up a CSR committee to oversee the implementation of its CSR obligations.
- Companies are allowed to keep unspent amounts earmarked for CSR in this designated account but have to utilise it within three financial years.
- The CSR committee will oversee its utilisation.
- Companies making losses in the immediate preceding financial year will be exempted from undertaking corporate social responsibility (CSR) activity that year if they were eligible for CSR due to their net profit. Companies, however, will have to spend the carry forward or unspent CSR obligation of the previous year.
- This exemption will be available only to those companies eligible for CSR due to their profits.
- The new rules have also revised the amount to be spent on Social impact assessment of the CSR project to 2 per cent of the total CSR obligation or Rs. 50 lakh, whichever is higher.
- This expenditure on impact study will be part of the CSR obligation. For example, if the CSR obligation of any company is Rs.100 crore in a year, earlier only Rs. 50 lakh was allowed to be spent on impact assessment which will now be allowed up to Rs. 2 crore.
CSR
- CSR rules are applicable to companies with a net profit of over Rs. 5 crore or networth of over Rs. 500 crore or turnover of Rs. 1,000 crore.
