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Unspent Amount of CSR

The document discusses provisions around unspent corporate social responsibility (CSR) amounts as per Indian law. It states that if a company fails to spend its mandated CSR amount, the board must specify reasons in its report and transfer unspent non-ongoing project amounts to a Schedule VII fund within 6 months. It further notes that unspent amounts for ongoing projects must be transferred to a separate account within 30 days and spent within 3 years, or else transferred to a Schedule VII fund. Finally, it mentions penalties for non-compliance with transferring unspent CSR amounts.

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40 views

Unspent Amount of CSR

The document discusses provisions around unspent corporate social responsibility (CSR) amounts as per Indian law. It states that if a company fails to spend its mandated CSR amount, the board must specify reasons in its report and transfer unspent non-ongoing project amounts to a Schedule VII fund within 6 months. It further notes that unspent amounts for ongoing projects must be transferred to a separate account within 30 days and spent within 3 years, or else transferred to a Schedule VII fund. Finally, it mentions penalties for non-compliance with transferring unspent CSR amounts.

Uploaded by

Neville Buhariwalla
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Provisions relating to unspent amount of CSR

2nd Proviso to Section 135(5)


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 8[and, unless the unspent amount relates to any ongoing project referred to in sub-section (6),
transfer such unspent amount to a Fund specified in Schedule VII, within a period of six months
of the expiry of the financial year].

Section 135(6)
Any amount remaining unspent under sub-section (5), pursuant to any ongoing project, fulfilling
such conditions as may be prescribed, undertaken by a company in persuance of its Corporate Social
Responsibility Policy, shall be transferred by the company within a period of thirty days from the end
of the financial year to a special account to be opened by the company in that behalf for that financial
year in any scheduled bank to be called the Unspent Corporate Social Responsibility Account, and
such amount shall be spent by the company in pursuance of its obligation towards the Corporate
Social Responsibility Policy within a period of three financial years from the date of such transfer,
failing which, the company shall transfer the same to a Fund specified in Schedule VII, within a
period of thirty days from the date of completion of the third financial year.

Rule 9(10)
Until a fund is specified in Schedule VII for the purposes of subsection (5) and(6) of section 135 of
the Act, the unspent CSR amount, if any, shall be transferred by the company to any fund included in
schedule VII of the Act.”.

Section 135(7)
If a company is in default in complying with the provisions of sub-section (5) or sub-section (6), the
company shall be liable to a penalty of twice the amount required to be transferred by the company to
the Fund specified in Schedule VII or the Unspent Corporate Social Responsibility Account, as the
case may be, or one crore rupees, whichever is less, and every officer of the company who is in
default shall be liable to a penalty of one-tenth of the amount required to be transferred by the
company to such Fund specified in Schedule VII, or the Unspent Corporate Social Responsibility
Account, as the case may be, or two lakh rupees, whichever is less.]

Sources:
http://ebook.mca.gov.in/Actpagedisplay.aspx?PAGENAME=17518
http://ebook.mca.gov.in/Default.aspx?page=rules
http://ebook.mca.gov.in/Actpagedisplay.aspx?PAGENAME=17923

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