The good, the bad and the ugly of the new Corporate Social Responsibility Policy
Like any new rule meant to clean up, this one too will face short-term challenges till the industry adapts to the new order.
Synopsis
With a Covid pandemic still upon us, is this the right time to adopt a stringent CSR policy? Of course, these amendments were in the works for a long time. But, then, will this stop the widely relevant ‘payback practices’?
According to the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021, which came into effect from January 22, a company now needs to spend 2% of the average net profit of the previous three financial years on corporate social responsibility (CSR) activity. A chief financial officer (CFO) will now have to factor in CSR as a major element in her tax planning since the new rules make it close to impossible to save on the
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On January 22, 2021, the Government of India brought into effect
the Companies (Corporate Social Responsibility Policy) Amendment
Rules, 2021 (“
Rules”). The Rules
amended the exiting Companies (Corporate Social Responsibility
Policy) Rules, 2014 (“
Existing
Rules”).
To address the pandemic, the Rules have amended the definition
of Corporate Social Responsibility
(“
CSR”) to clarify that activities
undertaken in pursuance of normal course of business of the company
shall not be included under the ambit of CSR. However, the Rules do
make an exception. Any company engaged in research and development
Ministry of Corporate Affairs brings amended CSR rules into effect; here s what changes
The Ministry of Corporate Affairs has released a new order notifying the amendments in the CSR rules for companies. It comes into effect starting today.
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The provisions of the
2019 Amendment to the Companies Act, 2013 pertaining to Corporate Social Responsibility (CSR) came into force on January 22. These rules may be called the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021, a gazetted order released by the
Ministry of Corporate Affairs (MCA) of the Government of India stated.
As per the new provisions, every entity that intends to undertake any CSR activity will have to register itself with the Central Government by filing the form CSR-1 electronically with the Registrar of Companies, with effect from April 1, 2021.