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    CSR_Corporate Social responsibility calculation

    Posted By : Anuradha / Published on : 31-May-2022 05:08 AM / View : 339 / Comment : 2

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    Does one consider profit after tax or profit before tax for applicability of CSR?
    Read more on : calculation responsibility social csrcorporate

    • Hi

      As per the CSR provisions, the 2% of the average profit is calculated as profit before tax will be calculated.

      01-06-2022 / 05:55:36 AM
    • Dear Folks!

      As per Section 135 read with Rule 2 of The Companies (CSR Policy) Rule, 2014:

      “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:-

      (i) any profit arising from any overseas branch or branches of the company, whether operated as a separate company or otherwise; and

      (ii) 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 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;

      In my opinion, we should consider Profit After Tax of Preceeding FY for checking applicability of CSR. However, while computing the expenditure spent on CSR, the 2% of the average profit is calculated on Profit before tax.

      13-06-2022 / 05:48:38 AM
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