Transfer of CSR Amount

[Jaya Singh]

Dear All,

What will be the consequences if a company fails to transfer the unspent CSR amount  (Other than ongoing project) to a Fund specified in Schedule VII, within a period of six months of the expiry of the financial year?

Thanks & Regards,

Jaya Vinay Singh

Practising Company Secretary

[B. Vinay Kumar]

Dear sir 

If the csr amount is of fy 23-24 then it should be spent inthe fy 24-25 if not spent with inthe 6 months of completion of fy 24-25 I.e by 30-09-25 it should be transferred to schedule 7.

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[Jaya Singh]

Dear All,

The unspent amount has to be transferred to the fund within 6 month i.e. by 30th September,. However act is silent where the said amount is not transferred within 6 months.

Thanks & Regards,

Jaya Vinay Singh

Practising Company Secretary

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[Gopal Rathnam]

1. Please refer penal provision - Section 135(7) of the Companies Act, 2013.

2.  A company in default faces a penalty of twice the unspent CSR amount or ₹1 crore, whichever is less.

3.  Every officer of the company who is in default (typically directors and senior management) is liable to a penalty of one-tenth of the unspent amount or ₹2 lakh, whichever is less.

4.   penalties are imposed regardless of whether the company eventually transfers the funds, emphasizing the importance of timely compliance

I remember to have read couple of cases where ROC has imposed penalties. But the company may prefer an appeal to RD. invariably, prescribed penalties are paid by the company