Dear Friends,
Wish you all Happy Tamil New Year Day.
Is 80-G mandatory to get CSR funds by a Voluntary Organisation?
V.B.Chandrasekaran,
Chatti Mahatma Gandhi Aashramam,
Chatti Post, Chinthur Mandal, Khammam District,
Andhra Pradesh, Pin Code: 507129
I do not know what has gone wrong. My post/reply on 1st May needs two big correction.1) 2% of the profit, 2)Profit is calculated after tax- meaning deducting taxes.
V.B.Chandrasekaran,
Chatti Mahatma Gandhi Aashramam,
Chatti Post, Chinthur Mandal, Khammam District,
Andhra Pradesh, Pin Code: 507129.
Email: verivaan2049@yahoo.com antarbharatid2010@gmail.com;
I think sometimes common sense works better than technical sense.
1. CSR is 2% of the profits after all expenses, tax and tax deductions for 80-g or 35-ac. There cannot be further tax benefits because profit is calculated after all benefits.
2. Companies making routine donations need 80-G or 35-C certification to claim tax benefits. Routine donations are not to mixed with mandatory CSR.
V.B.Chandrasekaran,
Chatti Mahatma Gandhi Aashramam,
Chatti Post, Chinthur Mandal, Khammam District,
Andhra Pradesh, Pin Code: 507129.
Email: verivaan2049@yahoo.com antarbharatid2010@gmail.com;
My personal view is that company has to allocate 2% profit for CSR. Spend it in project mode as per CSR policy approved by the board. Still finance ministry has not given any tax rebate on it. Therefore for this 2% money 80G makes no difference. They have to report for 2% and get no tax benefit on it.
Dear K.K.Upadhyay (and B.V.Soma Sastry),
When 2% of tax, it is an amount after paying taxes. To my knowledge, tax is calculated after tax. We are only fighting on an unsaid fact.
Soma Sastry\’s assumption that \"any CSR providing funds to the NGOs will do so for tax rebates\" is illogical but not fact, since CSR is a mandatory compliance of spending 2% of profits for public good and not for tax benefits.
V.B.Chandrasekaran
Dear Friends,
Does the CSR law not say that the amount spent up to the mandatory % under CSR within a FY, is exempt from all taxes? If that is so, the corporate group does not insist on / derives no benefit from 80G with the recipient. If any Corporate group contributes to NGOs over and above the mandatory % to be spent under CSR, then the excess contribution can be brought under 80G, if the recipient has 80G registration. Is it not?
Another question:
Does the CSR law permit either any State Government or Central Government to direct the Corporate group to donate the CSR fund to CM’s / PM’s Relief fund?
Udayashankar
While fully agreeing to Udayashankar, I believe that the CSR Law should incorporate not insisting on 80-G. This can be a special guideline of the Government because many smaller organisations will find it to comply with 80G. One secret all of you know, it cost substantially too.
To the Second part of the question, it is obnoxious to direct CSR funds to be given to CM of PM fund, because it is meant as another arm (other than government) of funding the Communities in need. Let this not be another Government taxation
V.B.Chandrasekaran,
Chatti Mahatma Gandhi Aashramam,
Chatti Post, Chinthur Mandal, Khammam District,
Andhra Pradesh, Pin Code: 507129.
Email: verivaan2049@yahoo.com antarbharatid2010@gmail.com;
Mobile: +919490109328 +918297976970
Well, for a change, I have a view different from the view of Mr. Sastry. If the CSR funds are given to an organisation as “Project funds” they are not treated as “donations”. For this purpose, what is important is that the recipient organisation should have 12A registration. 80G registration, in any case, is optional under the Income Tax Act.
Best regards
Sriraman
Dear Mr. Chandrasekaran,
Greetings from Hyderabad!
My assumption is that any CSR providing funds to the NGOs will do so for tax rebates. Therefore, invariably all the CSR, as a precondition will seek a copy of 80G from the NGOs.
Thanks and regards,
B V Soma Sastry