Amendments and FAQs pertaining to CSR Act &

Notified Rules

Geetanjali Gaur
Tuesday, 9th January 2024

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 SECTION 135 - 1st APRIL, 2013
Every Company (Pub or
1. Pvt)

Net Profit of Rs. 5 Cr

Net Worth of Rs. 500 Turnover of Rs. 1000
or more
Cr or more Cr or more

During any Financial Year

Shall constitute a Corporate Social Responsibility Committee of the Board consisting of Minimum 3
directors, out of which at least one director shall be an independent director.

2) The Board's report under shall disclose the composition of the Corporate Social Responsibility
Committee.

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 FAQs related to eligibility..
Q. Whether a holding or subsidiary of a company fulfilling the criteria under
section 135(1) has to comply with the provisions of section 135, even if the
holding or subsidiary itself does not fulfil the criteria?

Ans. No, the compliance with CSR requirements is specific to each company.
A holding or subsidiary of a company is not required to comply with the CSR
provisions unless the holding or subsidiary itself fulfils the eligibility criteria
prescribed under section 135(1) stated above. Example: Company A is
covered under the criteria mentioned in section 135(1). Company B is
holding company of company A. If Company B by itself does not satisfy any
of the criteria mentioned in section 135(1), Company B is not required to
comply with the provisions of section 135

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 FAQs related to eligibility..
Q. Whether provisions of CSR are applicable to a section 8 Company?
Ans. Yes, section 135(1) of the Act commences with the words “Every
company........” and thus applies to section 8 companies as well.
Q. Whether CSR provisions apply to a company that has not completed
the period of three financial years since its incorporation?
Ans. Yes. If the company has not completed three financial years since
its incorporation, but it satisfies any of the criteria mentioned in section
135(1), the CSR provisions including spending of at least two per cent
of the average net profits made during immediately preceding financial
year(s) are applicable.

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COMPOSITION OF CSR COMMITTEE
Listed companies Three or more directors, out of which at least one shall be an independent director.

Unlisted public Three or more directors, out of which at least one shall be an independent director.
companies However, if there is no requirement of having an independent director in the company,
two or more directors
Private companies Two or more directors. No independent directors are required as mentioned in the
proviso under section 135(1).
Foreign company At least two persons out of which: (a) one shall be as specified under clause (d) of
subsection (1) of section 380 of the Act, and
(b) another shall be nominated by the foreign company. (Refer rule 5(1) of the
Companies (CSR Policy) Rules, 2014)
Where the amount required to be spent by a company on CSR does not exceed fifty lakh rupees, the
requirement for constitution of the CSR Committee is not mandatory and the functions of the CSR Committee,
in such cases, shall be discharged by the Board of Directors of the company

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 ROLE OF THE CSR COMMITTEE

CSR COMMITTEE

Formulate and recommend a CSR policy to the board

Recommend activities and the amount of expenditure to be

incurred on CSR activities

Monitor the CSR policy from time to time

Formulate and recommend to the Board, an

annual action plan

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 ROLE OF THE BOARD
THE BOARD
✓ Approve the CSR policy;
✓ Disclose contents of such policy in its report and also place it on the company's
website, if any;
✓ Ensure that the activities included in the CSR policy are undertaken by the
company;
✓ Ensure that the company spends, in every financial year, at least two per cent of
the average net profits of the company made during the three immediately
preceding financial years;
✓ Satisfy itself regarding the utilization of the disbursed CSR funds; and
✓ If the company fails to spend at least two per cent of the average net profits of
the company, the Board shall, in its report made under clause (o) of sub-section
(3) of section 134, specify the reasons for not spending the amount and transfer
the unspent CSR amount as per provisions of sections 135(5) and 135(6) of the
Act.

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FAQs related to role of Govt
Q. What is the role of the Government in the approval and
implementation of the CSR programmes/projects of a company?
Ans. Provisions of section 135, read with Schedule VII of the Act and
Companies (CSR Policy) Rules, 2014 provide the broad framework
within which the eligible companies are required to formulate their CSR
policies including activities to be undertaken and implementation of
the same. CSR is a board-driven process, and the Board of the company
is empowered to plan, approve, execute, and monitor the CSR activities
of the company based on the recommendation of its CSR Committee.
The Government has no direct role in the approval and implementation
of the CSR programmes /projects of a company.

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FAQs related to role of Govt
Q. What are the mechanisms for monitoring the CSR process?
Ans. CSR is a Board-driven process, and the Board of the company is
empowered to plan, decide, execute, and monitor the CSR activities of
the company based on the recommendation of its CSR Committee. The
CSR architecture is disclosure-based and CSR-mandated companies are
required to file details of CSR activities annually in MCA21 registry.
Companies are required to make necessary disclosures in the financial
statements regarding CSR including non-compliance. The existing legal
provisions such as mandatory disclosures, accountability of the CSR
Committee and the Board, and provisions for audit of accounts of the
company provide sufficient mechanisms for monitoring.

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FAQs related to role of Govt
Q. What is the role of the Government in monitoring compliance of CSR
provisions by companies?
Ans. The Government monitors the compliance of CSR provisions
through the disclosures made by the companies in the MCA 21 portal.
For any violation of CSR provisions, action can be initiated by the
Government against such non-compliant companies as per provisions
of the Companies Act, 2013 after due examination of records, and
following due process of law. Noncompliance of CSR provisions has
been notified as a civil wrong w.e.f. 22nd January, 2021.

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 SECTION 135......(5)
5. The Board shall ensure that the company spends, in every financial
year, at least two per cent of the average net profits of the
company made during the three immediately preceding financial
years, or

where the company has not completed the period of three

financial years since its incorporation, during such
immediately preceding financial years, in pursuance of its
Corporate Social Responsibility Policy.

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 SECTION 135 ........ (6)
Provided that the company shall give preference to the local area* and areas around
it where it operates, for spending the amount earmarked for Corporate Social
Responsibility activities;

Provided that if the company fails to spend such amount, the Board shall, in its
report made under clause (o) of sub-section (3) of section 134, specify the reasons
for not spending the amount. [and, unless the unspent amount relates to any
ongoing project referred to in sub-section (6), transfer such unspent amount to a
Fund specified in Schedule VII, within a period of six months of the expiry of the
financial year].

*The preference to local area in the Act is only directory and not mandatory in nature and companies need to balance
local area preference with national priorities.

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 SECTION 135 ........ (7)
6. Unspent Amount

Unspent Corporate Social Responsibility Account

(within 30 days of the end of financial year)

Amount shall be spent by the company in pursuance of its obligation towards the
Corporate Social Responsibility Policy within a period of three financial years

Transfer the same to a Fund specified in Schedule VII, within a period of thirty days
from the date of completion of the third financial year.

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 TREATMENT OF UNSPENT CSR AMOUNT
Nature of unspent amount Action required Timelines

Unspent amount pertains Transfer such unspent Within 30 days from the
to ‘ongoing projects’ amount to a separate bank end of the financial year.
account of the company to
be called as ‘Unspent CSR
Account’.
Unspent amount pertains Transfer unspent amount to Within 6 months from the
to ‘other than ongoing any fund included in end of the financial year.
projects’ Schedule VII of the Act.
(Constitution of CSR Committee is mandatory
in such cases now)

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 SECTION 135 ........ (8)
7. Penalty of twice the amount required to be transferred by the
company to the Fund specified in Schedule VII or the Unspent
Corporate Social Responsibility Account, as the case may be, or one
crore rupees, whichever is less, and
Every officer of the company who is in default shall be liable to a
penalty of one-tenth of the amount required to be transferred by the
company to such Fund specified in Schedule VII, or the Unspent
Corporate Social Responsibility Account, as the case may be, or two
lakh rupees, whichever is less.

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 SECTION 135 ........ (9)

8. The Central Government may give such general or special directions

to a company or class of companies as it considers necessary to
ensure compliance of provisions of this section and such company or
class of companies shall comply with such directions.

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 SECTION 135 ........ (10)

9. Where the amount to be spent by a company under sub-section (5)

does not exceed fifty lakh rupees, the requirement under sub-section
(1) for constitution of the Corporate Social Responsibility Committee
shall not be applicable and the functions of such Committee
provided under this section shall, in such cases, be discharged by the
Board of Directors of such company.

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FAQ related to computation of 2%
Q. How is average net profit calculated for the purpose of section 135
of the Act? Whether ‘profit before tax’ or ‘profit after tax’ is used for
such computation?
Ans: The average net profit for the purpose of determining the
spending on CSR activities is to be computed in accordance with the
provisions of section 198 of the Act and will also be exclusive of the
items given under rule 2(1)(h) of the Companies (CSR Policy) Rules,
2014. Section 198 of the Act specifies certain additions/deletions
(adjustments) to be made while calculating the net profit of a company
(mainly it excludes capital payments/receipts, income tax, set-off of
past losses). Profit Before Tax (PBT) is used for computation of net
profit under section 135 of the Act.
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SCHEDULE VII – CSR THEMATIC AREAS

1. Eradicating hunger, poverty and

malnutrition, promoting health care, 2. Promotion of education, special education and
sanitation & safe drinking water vocational skills
including contribution to Swacha
Bharat kosh
4.Ensuring environmental 5.Protection,
3. Gender Equality, Women sustainability, ecological promotion and
empowerment , senior citizens and balance, wildlife & natural restoration of
economically backward groups resources conservation National Heritage
including clean Ganga and Culture
movement

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SCHEDULE VII – CSR THEMATIC AREAS…
6. Measures for the benefit of
armed forces veterans, war
widows and their 7. Rural sports,
dependents, [ Central Armed Paralympic and
Police Forces (CAPF) and Central Olympic sports
Para Military Forces (CPMF) 9. Technology incubators
veterans, and their dependents
including widows];

8. PM National Relief Fund and any other funds

setup by the Central Govt. for socio economic
development & welfare of SC/ST/OBC, Swachh
Bharat, Clean Ganga and PM CARES

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 SCHEDULE VII – CSR THEMATIC AREAS…

12. Disaster management, including

10.Rural Development 11.Slum Development relief, rehabilitation and
Projects reconstruction activities

Covid - 19

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 CSR ACTIVITIES

Activities undertaken in
Projects or programs or India only except for
activities (either new or training of Indian sports
ongoing), excluding Collaborate with personnel representing
activities undertaken in other companies any State or Union
pursuance of its normal territory at national level
course of business or India at international
level

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ACTIVITIES NOT ADMISSIBLE AS CSR

Activities not Activities not

admissible as CSR admissible as CSR

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 CSR IMPLEMENTATION AGENCIES
(a) company established under section 8 of the Act, (b) a company established under section 8 of the
or a registered public trust or a registered society Act or a registered trust or a registered society,
exempted under sub clauses (iv), (v), (vi) or (via) of established by the Central Government or State
clause (23C) of Section 10 or registered under Government; or
section 12A and 80 G of the Income Tax Act, 1961
(43 of 1961), established by the company, either
singly or along with any other company, or

(c) any entity established under an Act of Parliament (d) a company established under section 8 of the
or a State legislature; or Act, or a registered public trust or a registered
society, exempted under sub clauses (iv), (v), (vi)
or (via) of clause (23C) of Section 10 or registered
under section 12A and 80G of the Income Tax Act,
1961, and having an established track record of at
least three years in undertaking similar activities.

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CSR IMPLEMENTATION…… (2)
• Every entity, covered under sub-rule (1), who intends to undertake any CSR
activity, shall register itself with the Central Government by filing the form CSR-1
IA electronically with the Registrar, with effect from the 01st day of April 2021:

• Form CSR-1 shall be signed and submitted electronically by the entity and shall
be verified digitally by Chartered Accountant in practice or a Company Secretary
IA in practice or a Cost Accountant in practice.

• On the submission of the Form CSR-1 on the portal, a unique CSR Registration
Number shall be generated by the system automatically.
IA

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FAQ related to implementation..
Q. What is meant by ’registered public trusts’ in such states where registration
is not mandatory?
Ans. Registered public trust (as referred to in rule 4(1) of the Companies (CSR
Policy) Rules,2014) would include trusts registered under the Income Tax Act,
1961 in respect of those states where registration of public trusts is not
mandatory.
Q. What is the purpose of registration of the implementing agency on MCA21
portal?
Ans. The identification of suitable implementing agencies is a major concern
for companies. Registration of implementing agencies on MCA21 portal is
aimed at creating a database of such agencies for companies who may want
to engage them. Further, this will bring accountability and transparency in the
implementation of CSR activities and thereby strengthen the CSR eco-system.
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CSR POLICY SHOULD INCLUDE
Recommendat Formulation of
ions of its CSR the annual
Committee action plan

A statement Guiding principles

containing the for selection,
implementation
approach and and monitoring of
direction CSR activities

POLICY

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ANNUAL ACTION PLAN
Manner of
Execution

modalities of monitoring
utilisation of
funds and
Action and
reporting
implementation
schedules Plan mechanism

need and
impact
assessment

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 BOARD/CSR COMMITTEE’S
RESPONSIBILITY

• Macro level approach/Strategy/thought process

Duties of • Criteria for Project & Program rollout
the CSR
Committee

• Clarity of thought and action at Board level required for spending of 95% CSR
Duties of funds
the Board

• AAP would need to be meticulously developed in such a way that Grant Cycle syncs up
with FY Cycle as far as possible to avoid / minimize non-spending by FY end
AAP
IMMEDIATE ACTION REQUIRED

Comprehensive CSR Policy Review

Re-alignment / Re-formulation

Development of AAP within March’2021

for 2021-22
Upload on Public Domain
"Net profit" means the net profit of a company as per its financial
statement prepared in accordance with the applicable provisions of
the Act, but shall not include the following, namely: -

• (i) any profit arising from any overseas branch or branches of the company,
whether operated as a separate company or otherwise;

• (ii) any dividend received from other companies in India, which are covered under
and complying with the provisions of section 135 of the Act:

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CSR EXPENDITURE

The Board of a company shall satisfy itself that the funds so disbursed
have been utilized for the purposes and in the manner as approved by
it and the Chief Financial Officer or the person responsible for
financial management shall certify to the effect.

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 CSR EXPENDITURE…….(2)
▪ The board shall ensure that the administrative overheads* shall not
exceed five percent of total CSR expenditure of the company for the
financial year.
▪ Any surplus arising out of the CSR activities shall not form part of the
business profit of a company and shall be ploughed back into the same
project or shall be transferred to the Unspent CSR Account and spent in
pursuance of CSR policy and annual action plan of the company or
transfer such surplus amount to a Fund specified in Schedule VII, within a
period of six months of the expiry of the financial year.

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CSR EXPENDITURE……(3)

In case of ongoing project*, the Board of a Company shall monitor the

implementation of the project with reference to the approved
timelines and year-wise allocation and shall be competent to make
modifications, if any, for smooth implementation of the project within
the overall permissible time period.

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ADMINISTRATIVE OVERHEADS*

“Administrative overheads” means the expenses incurred by the

company for ‘general management and administration’ of
Corporate Social Responsibility functions in the company but shall
not include the expenses directly incurred for the designing,
implementation, monitoring, and evaluation of a particular
Corporate Social Responsibility project or programme.

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 ADMINISTRATIVE OVERHEADS
Administrative overheads are the expenses incurred by the company for ‘general
management and administration’ of CSR functions. However, the expenses which are
directly incurred for the designing, implementation, monitoring, and evaluation of a
particular CSR project or programme, shall not be included in the administrative
overheads. Administrative overheads generally comprise of items such as employee
costs, utilities, office supplies, legal expenses, etc. However, expenses which are
attributed to the project implementation shall be included in project cost only.
Example: Salary and training for the employees working in the CSR division of a
company, stationery cost, travelling expenses, etc. may be categorised as administrative
overheads. However, salary of school teachers or other staff, etc. for education-related
CSR projects shall be covered under education project cost. The maximum permissible
limit for administrative overheads is five per cent of the total CSR expenditure of the
company for the financial year

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FAQs related to Over Heads ..
Q. Are administrative overheads applicable only for expenses incurred
by the company, or can they be applied to expenses incurred by the
implementing agency as well?
Ans. According to rule 2(1)(b) of the Companies (CSR Policy) Rules,
2014, administrative overheads mean the expenses incurred by the
company in the general management and administration of CSR
functions in the company. Therefore, expenses incurred by
implementing agencies on the management of CSR activities shall not
amount to administrative overheads and cannot be claimed by the
company.

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FAQs related to Over Heads ..
Q. Whether contribution to the corpus of an entity is an admissible CSR
expenditure?
Ans. No, the provision relating to contribution to corpus as admissible CSR
expenditure has been amended and the contribution to corpus of any entity is
not an admissible CSR expenditure w.e.f. 22nd January, 2021.

Q. Whether expenses related to transfer of capital asset as provided under rule

7(4) of Companies (CSR Policy) Rules, 2014, will qualify as admissible CSR
expenditure?
Ans. Yes, the expenses relating to transfer of capital asset such as stamp duty
and registration fees, will qualify as admissible CSR expenditure in the year of
such transfer.
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 SURPLUS
Surplus refers to income generated from the spend on CSR activities, e.g.,
interest income earned by the implementing agency on funds provided
under CSR, revenue received from the CSR projects, disposal/sale of
materials used in CSR projects, and other similar income sources.
The surplus arising out of CSR activities shall be utilised only for CSR
purposes.

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 CONTRIBUTION TO CORPUS

The provision relating to contribution to corpus as admissible CSR

expenditure has been amended and the contribution to corpus of any
entity is not an admissible CSR expenditure w.e.f. 22nd January, 2021.

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 MODES TO SPEND CSR MONEY
CSR expenditure can be incurred in multiple modes:
✓‘Activities route’, which is a direct mode wherein a company undertakes the CSR
projects or programmes as per Schedule VII of the Act, either by itself or by engaging
implementing agencies as prescribed in Companies (CSR Policy) Rules, 2014.
✓‘Contribution to funds route', which allows the contributions to various funds as
specified in Schedule VII of the Act.
✓Contribution to incubators and R&D projects, as specified in item (ix)(a) and
contribution to institutes/organisations, engaged in research and development
activity, as specified under item (ix)(b) of Schedule VII of the Act.

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 FUNDS OF SCHEDULE VII
Contributions to the following funds shall be admissible as CSR expenditure:
(i) Swachh Bharat Kosh
(ii) Clean Ganga Fund
(iii) Prime Minister’s National Relief Fund (PMNRF)
(iv) Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM
CARES Fund)
(v) Any other fund set up by the Central Government and notified by the Ministry of
Corporate Affairs, for socio-economic development and relief and welfare of the
Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and
women.

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ONGOING PROJECT
“Ongoing Project” means a multi-year project undertaken by a
Company in fulfillment of its CSR obligation having timelines not
exceeding three years excluding the financial year in which it was
commenced, and shall include such project that was initially not
approved as a multi-year project but whose duration has been
extended beyond one year by the board based on reasonable
justification;

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▪ 1+3 years applicability, where year 1 is the year in which the project was approved.
▪ Budget for each year (1+3) will be sub-set of the CSR budget of that year.
▪ A 1-year project initially not classified as an Ongoing Project can be approved within concerned
FY as one by the Board based on reasonable justification.
▪ Corporates encouraged to look at medium to long term CSR projects so that better and more
measurable impact can be arrived at.
▪ Also, Sustainability is being subtly promoted when the donor moves out.
▪ Mid-course correction permitted to Board within year 1 to classify a project as Ongoing based
on need/requirement.
▪ In above case un-utilised, but allocated, funds would need to be put into Unspent CSR
Account(UCSRA) within 30 days of 1st April 2021. These can be spent by 31st March 2024.

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SET OFF OF FUNDS
Where a company spends an amount in excess of
requirement , such excess amount may be set off
against the requirement to spend up to
immediatesucceeding three financial years
provided:-

the excess amount available for

set off shall not include the
surplus arising out of the CSR
activities

the Board of the

company shall pass a
resolution to that effect

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ACQUISITION OF ASSETS
The CSR amount may be spent by a company for
creation or acquisition of a capital asset, which
shall be held by -
a company established
under section 8 of the
Act, or a Registered
Public Trust or beneficiaries of the said
Registered Society, CSR project, in the form
a public authority
having charitable of self-help groups,
objects and CSR collectives, entities; or
Registration Number
under sub-rule (2) of
rule 4; or

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ACQUISITION OF ASSETS….(2)
Provided that any capital asset created by a company prior to the
commencement of the Companies (Corporate Social Responsibility
Policy) Amendment Rules, 2021, shall within a period of one hundred
and eighty days from such commencement comply with the requirement
of this rule, which may be extended by a further period of not more than
ninety days with the approval of the Board based on reasonable
justification.

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FAQs related to CSR Expenditure..
Q. What tax benefits can be availed under CSR?
Ans. No specific tax exemptions have been extended to CSR
expenditure. The Finance Act, 2014 also clarifies that expenditure on
CSR does not form part of business expenditure.

Q. Whether contribution in kind can be monetized to be shown as CSR

expenditure?
Ans. The requirement comes from section 135(5) that states that “The
Board of every company shall ensure that it spends…” Therefore, CSR
contribution cannot be in kind and monetized.

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FAQs related to CSR Expenditure..
Q. Whether involvement of employees of a company in their CSR projects can be
monetized and accounted for under the head of ’CSR expenditure’?
Ans. No, involvement of employees in CSR projects of a company cannot be
monetized. Contribution and involvement of employees in CSR activities of the
company will no doubt generate interest/pride in CSR work and promote
transformation from Corporate Social Responsibility (CSR) as an obligation to Socially
Responsible Corporate (SRC) in all aspects of their functioning. Companies, therefore,
should be encouraged to involve their employees in CSR activities.
Q. What is the meaning of sponsorship activities deriving marketing benefits for
company’s products or services?
Ans. Sponsorship activities of an event are done with an aim of deriving marketing
benefits for a company’s product or services. The intent of CSR is to encourage
companies to undertake the activities in a project or programme mode rather than as
a one-off event. Companies shall not use CSR purely as a marketing or brand building
tool for their business, but brand building as a collateral benefit does not vitiate the
spirit of CSR.
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CSR REPORTING
CSR
REPORTING

Display of CSR
Activities on the
Annexure 1 &
website 2

5 % of the total Impact Assessment for

CSR or 50 Lakh Companies having CSR
spent of 10 Cr or more of
what ever is projects worth 1 Cr or
less more through 3rd Party

Impact
Assessment
Report to be
placed before
Board

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FAQ related to reporting..
Q. Whether registration of implementing agency by filing e-form CSR-1 is
mandatory in case the company carries out CSR activities directly?
Ans. No. The question of filing e-form CSR-1 does not arise in case the
company carries out CSR activities directly.
Q. Whether reporting of CSR is mandatory in Board’s Report?
Ans: Yes, as per rule 8(1) of the Companies (CSR Policy) Rules, 2014, the
Board’s Report pertaining to any financial year, for a CSR-eligible company,
shall include an annual report on CSR containing particulars specified in
Annexure I or Annexure II of the said rules, as applicable

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 IMPACT ASSESSMENT
• Rule 8(3) of the Companies (CSR Policy) Rules, 2014 mandates following class of
companies to conduct impact assessment:
(i) Companies with minimum average CSR obligation of Rs. 10 crore or more in
the immediately preceding 3 financial years; and
(ii) Companies that have CSR projects with outlays of minimum Rs. 1 crore and
which have been completed not less than 1 year before undertaking impact
assessment.
• Impact assessment shall be carried out project-wise only in cases where both the
above conditions are fulfilled. In other cases, it can be taken up by the company on a
voluntary basis.
• 2% of CSR expenditure in the FY or Rs. 50 lacs whichever is higher to be used for
impact assessment for qualifying companies.

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FAQs related to Impact Assessment
Q. Whether impact assessment reports of all the CSR projects shall be annexed to the
annual report on CSR?
Ans. Rule 8(3)(b) of the Companies (CSR Policy) Rules, 2014 provides that impact
assessment reports shall be placed before the Board and shall be annexed to the
report on CSR. It is clarified that web-link to access the complete impact assessment
reports and providing executive summary of the impact assessment reports in the
annual report on CSR, shall be considered as sufficient compliance of the said rule.
Q. When two or more companies collaborate for implementation of a CSR project,
should the impact assessment carried out by one company be shared with other
companies?
Ans: Yes, in case two or more companies choose to collaborate for the implementation
of a CSR project, then the impact assessment carried out by one company for the
common project may be shared with the other companies for the purpose of
disclosure to the Board and in the annual report on CSR. The sharing of the cost of
impact assessment may be decided by the collaborating companies subject to the limit
as prescribed in rule 8(3)(c) of the Companies (CSR Policy) Rules, 2014 for each
company. 53
INTERNATIONAL ORGANISATIONS
A company may engage international organisations* for designing,
monitoring and evaluation of the CSR projects or programmes as per its
CSR policy as well as for capacity building of their own personnel for
CSR.

“International Organisation” means an organisation notified by the Central Government as an

international organisation under section 3 of the United Nations (Privileges and Immunities) Act,
1947 (46 of 1947), to which the provisions of the Schedule to the said Act apply.

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FAQs …
Q. Should a company open a separate ’Unspent CSR Account’ for each ongoing
project?
Ans. No, a company can open a single special account, called ‘Unspent Corporate
Social Responsibility Account’, for a financial year in any scheduled bank, to
transfer the unspent amount w.r.t ongoing project(s) of that financial year. A
company needs to open a separate ’Unspent CSR Account’ for each financial year
but not for each ongoing project.
Q. Will the penal proceedings apply even after the unspent amount has been
transferred to the Unspent CSR Account or to the funds mentioned in Schedule
VII of the Act?
Ans. The penalty does not relieve the company from the obligations under the
law, and the penalty is over and above the obligated amount required to be
transferred under section 135(5) or 135(6). The penalty is the consequence of
not abiding by the law, and not an alternative for the same. 55
 THANK YOU

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