Check CSR and calculate spend
Use section 198 adjusted profits, not simply accounting PAT.
CSR applicability
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Indicative annual obligation
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| Measure | Result |
|---|---|
| Average adjusted profit | — |
| CSR committee | — |
How This Is Calculated
CSR provisions apply if a company's net worth is ₹500 crore or more, or turnover is ₹1,000 crore or more, or net profit is ₹5 crore or more, in the immediately preceding financial year. Where applicable, the CSR obligation is 2% of average net profit over the preceding 3 financial years.
Frequently Asked Questions
Worked examples and what to check
The calculator answers two separate questions, and it helps to keep them apart: does section 135 apply to the company this year, and if it does, how much is the indicative spend.
Worked examples
- Applicability. A company had turnover of ₹820 crore, net worth of ₹310 crore and net profit of ₹6.4 crore in the immediately preceding financial year. Neither the turnover nor the net worth threshold is met, but the net profit threshold (₹5 crore) is, and meeting any one of the three is enough, so section 135 applies.
- Amount. Adjusted net profit under section 198 was ₹8 crore, ₹12 crore and ₹10 crore in the three preceding years. The average is ₹10 crore and 2% of it is ₹20 lakh. Because the amount does not exceed ₹50 lakh, a CSR Committee is not mandatory and the Board can discharge its functions.
- Committee needed. If the average were ₹30 crore, the indicative spend would be ₹60 lakh. That is above ₹50 lakh, so the CSR Committee must be in place to formulate and monitor the CSR policy.
What to check before relying on the result
- Use adjusted net profit as computed under section 198 and the CSR Rules, not simply the profit after tax shown in the accounts, and use the three immediately preceding financial years for the average.
- The thresholds are tested on the immediately preceding financial year, and a company that stops meeting them for three consecutive financial years is outside section 135 until it meets them again.
- Unspent amounts are treated differently: for an ongoing project the balance goes to the Unspent CSR Account within thirty days of the end of the financial year and is spent within three years; for other unspent amounts the transfer is to a Schedule VII fund within six months of the end of the year.
- The Board report must disclose the CSR policy, the amount prescribed and spent, and the reasons for any shortfall. Confirm the current wording of section 135 and the CSR Rules on the Ministry of Corporate Affairs portal before filing.