Donations by companies to PM Cares Relief Fund qualifies as CSR expenditure
By : Legal Era
Update: 2020-03-30 07:05 GMT
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The Ministry of Corporate Affairs (MCA) has stated that donations by firms or companies to the emergency fund created by the Prime Minister Citizen Assistance and Relief in Emergency Situations (PM CARES) Fund created for dealing with the COVID 19 pandemic would qualify as CSR expenditure.According to the circular issued by the MCA, the PM CARES Fund has been set up to provide relief to...
The Ministry of Corporate Affairs (MCA) has stated that donations by firms or companies to the emergency fund created by the Prime Minister Citizen Assistance and Relief in Emergency Situations (PM CARES) Fund created for dealing with the COVID 19 pandemic would qualify as CSR expenditure.
According to the circular issued by the MCA, the PM CARES Fund has been set up to provide relief to those affected by any kind of emergency or distress situation.
The circular further states that any contribution made to the PM CARES Fund shall qualify as CSR expenditure under the Companies Act 2013.
Under the Companies Act, certain classes of profitable entities have to spend at least 2% of their three-year annual average net profit towards Corporate Social Responsibility (CSR) activities in a particular fiscal.
As per a previous circular by the MCA, corporate spending for various activities related to COVID-19 include promotion of healthcare, preventive healthcare, sanitation, disaster management etc. which would qualify for treatment as CSR.
Prime Minister Narendra Modi appealed to the citizens to donate generously stating that the Fund will also cater to similar distressing situations, if they occur in the times ahead.