Sep 30, 2022

Amendment in Companies (Corporate Social Responsibility Policy) Rules, 2014

MCA, by way of a Notification dated September 20, 2022, has amended the Companies (Corporate Social Responsibility Policy) Rules, 2014 (‘CSR Rules’). A new proviso is introduced in Rule 3 sub-rule (1), making it necessary for companies having any amount in their unspent corporate social responsibility account to constitute a corporate social responsibility (‘CSR’) committee to comply with provisions contained in Section 135 of Companies Act, 2013 (‘Act’). This notification also omits sub-rule (2) in Rule 3, which previously provided for relaxations for companies from CSR compliance which did not meet the thresholds provided under Section 135 for three consecutive financial years. The scope of Rule 4 which deals with various entities through which CSR activities can be implemented has been widened by including within its purview a registered public trust or a registered society which is exempted under sub-clauses (iv), (v), (vi) or (via) of Clause (23C) of Section 10 of the Income Tax Act, 1961, and established by the company, either by itself or along with any other company. Additionally, the extent to which the companies undertaking impact assessment may book expenditure towards CSR obligations has been reduced to two percent of the total CSR expenditure for that financial year or ₹ 5,000,000 (approx. UD$ 60,440), whichever is higher (as opposed to the previous permitted threshold of the lower of five percent of the total CSR expenditure for that financial year or ₹ 5,000,000 (approx. UD$ 60,440)).




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