CSR Set-off for Expenditure Incurred Prior to Applicability

[CS Students]

Dear all

I would like to seek a clarification regarding the CSR expenditure incurred by the Company in an earlier financial year.

During that financial year, the provisions of CSR under Section 135 of the Companies Act, 2013 were not applicable to the Company; however, the Company had voluntarily spent an amount towards CSR activities. In the subsequent financial year, CSR provisions became applicable to the Company.

In this context, I would like to understand whether the CSR amount spent in the year when CSR was not applicable can be claimed as a set-off against the CSR obligation of the year in which CSR became applicable.

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Thanks & Regards

CS Trainee

[Sanjeevan Rajendran]

What details do you need?

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[Pragya Mansukhani]

No. Cannot be set off in my view. Proper Board resolution and disclosures are required in the notes to accounts for the carry forward and set off. 

Thanks and regards,

FCS Pragya Mansukhani

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