Coronavirus outbreak: Government says contribution to PM-CARES Fund to qualify as CSR spending

By: |
Published: March 29, 2020 1:40:24 PM

Under the companies law, certain classes of profitable entities have to shell out at least 2 per cent of their three-year annual average net profit towards Corporate Social Responsibility (CSR) activities in a particular fiscal.

Coronavirus outbreak, PM-CARES Fund, CSR activities, CSR spending, COVID-19, companies act, latest news on coronavirusCSR funds could be utilised for various activities related to COVID-19, including those relating to preventive healthcare and sanitation.

Contribution by corporates to PM-CARES Fund will be considered as social welfare spending under the companies law, the government has said amid ongoing efforts to deal with the situation arising out of the coronavirus outbreak.
Under the companies law, certain classes of profitable entities have to shell out at least 2 per cent of their three-year annual average net profit towards Corporate Social Responsibility (CSR) activities in a particular fiscal.

“… any contribution made to the PM-CARES Fund shall qualify as CSR expenditure,” Corporate Affairs Minister Nirmala Sitharaman said in a tweet on Sunday. The corporate affairs ministry, which is implementing the companies law, has issued a memorandum clarifying that money donated by corporates to the fund would be considered as CSR expenditure.

The government has set up the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM-CARES Fund) which would be utilised to deal with any emergency or distress situation like those in the wake of the coronavirus outbreak.

“The PM-CARES Fund has been set up to provide relief to those affected by any kind of emergency or distress situation. Accordingly, it is clarified that any kind of contribution made to the PM-CARES Fund shall qualify as CSR expenditure under the Companies Act, 2013,” the ministry said in the memorandum issued on Saturday.

The memorandum comes less than a week after the ministry said that spending by corporates to deal with the coronavirus outbreak would be considered as CSR activity under the companies law. CSR funds could be utilised for various activities related to COVID-19, including those relating to preventive healthcare and sanitation.

Under Section 135 of the Companies Act, 2013, every company having net worth of at least Rs 500 crore, turnover of Rs 1,000 crore or more, or a minimum net profit of Rs 5 crore during the immediate preceding financial year has to make CSR expenditure. The number of coronavirus cases in the country has climbed to 979 and 25 people have lost their lives so far.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Banks continue to lend less even as deposit growth improves, credit growth now at  mere 6.5%
2Realme Smart TV, Realme Watch and Realme Buds Air Neo launched in India; everything you need to know
3BlueTrace: The tech that many want govt to incorporate in Aarogya Setu