The Corporate Affairs Ministry will explore the possibility of providing tax benefits to companies on money spent under Corporate Social Responsibility (CSR) activities.
The demand for tax benefits related to CSR activities came up during the more than two-hour long meeting between Corporate Affairs Minister Sachin Pilot and representatives from various companies here today.
"They were looking for it (CSR activities) to be tax deductible in some sense.
"I have taken this suggestion and will certainly discuss with the Finance Ministry whether we can evolve some sort of middle ground where we can heed to their request and still comply with the Bill," Pilot told reporters.
CSR spending would become compulsory for companies that meet certain criteria, under the amended Companies Bill. Among others, firms having Rs 5 crore or more profits in the last three years have to spend on CSR activities.
In case, the companies are not able to do the same, they have to disclose reasons in their books. Otherwise, they would face action.
About 80 representatives from various corporates, including senior officials, were present at the meeting. Pilot termed the "discussions" on CSR as fruitful.
According to an industry representative who took part in the meeting, there needs to be more clarity on what constitutes CSR activities and related issues.
Meanwhile, the Minister has suggested that companies can look at CSR spending for building toilets in girls schools.
Noting there are nearly 20,000 girls only schools in the country, Pilot citing rough calculations show that around Rs 100 crore expenditure can help in building toilets in them.
Lack of hygiene and sanitation is a contributing factor for high dropouts among school-going girls.
"If we can say that we have made open defecation history, at least for girls studying in government schools, I think that can be a big achievement for us," the Minister said.
Regarding the new Companies Bill, Pilot expressed hoped that it would be passed in the current Parliament session. "I have written to the Parliamentary Affairs Minister on it," he added.
In October, the government had approved amendments to Companies Bill 2011, including changes related to spending on CSR activities.