CSR Policy Amendment Rules are regulations issued by the Ministry of Corporate Affairs (MCA) in India to amend the existing CSR policy for companies. The rules were introduced in April 2021 under the Companies Act, 2013.
A BRIEF SUMMARY OF COMPANIES (CSR) AMENDMENT RULES, 2022
A company having any amount in its Unspent Corporate Social Responsibility (CSR) Account as per sub-section (6) of section 135 of the Companies Act,
2013 shall constitute a CSR Committee and shall comply with the provisions contained in sub-section (2) to (6) of the said Act.
If Section 135 (1) of the Companies Act, 2013 is once applicable, a company shall comply with the entire CSR provisions unless it ceases to meet the criteria during the “next three years” has been omitted.
The board shall ensure that the CSR activities are undertaken by the company itself or through implementing agency-New class of implementing agencies added by inserting “section 8 company, or a registered public trust or a registered society,
exempted under sub-clauses (iv), (v), (vi) or (via) of clause (23C) of section 10 of the Income Tax Act, 1961, and having an established track record of at least three years in undertaking similar activities”.
Further, such types of IAs do not need to get registration under sections 12A and 80G of the Income Tax, 1961.
Form CSR-1 has also been amended/revised to add an option for registration of the newly added clauses of IAs.
MCA has made amendments to 3 rules of CSR i.e. Rule 3, 4, and 8. A. Rule 3: Corporate Social Responsibility.
In sub-rule (1) after provision “A new proviso added”
Provided further that a company having any amount in its Unspent Corporate Social Responsibility Account as per sub-section (6) of section 135 shall constitute a CSR Committee and comply with the provisions contained in sub-section (2) to (6) of the said section.
Which amount is required to transfer in the “unspent CSR Account”?
Under the CSR rules, amounts remaining unspent in a financial year relating to an ongoing project as well as any unutilized surplus arising from the CSR activities are required to be deposited by the company in a special bank account called the ‘Unspent Corporate Social Responsibility Account.
Rule 3: Corporate Social Responsibility. –
Rule 2 fully omitted: eligibility to be checked every year Every company which ceases to be a company covered under sub-section (1) of section 135 of the Act for three consecutive financial years shall not be required to
(a) constitute a CSR Committee; and
(b) comply with the provisions contained in sub-section (2) to (6) sub-section (2) to (5) of the said section, till such time it meets the criteria specified in sub-section (1) of section 135.
Implementation: After omission of Rule 2, Only a Company fall under Section 135(1) shall require to constitute CSR Committee. Therefore, if CSR is applicable to Company for one year, then CSR Committee can be dissolved after one year.
Rule 4: CSR Implementations. –
Following below mentioned shall also be allowed for the purpose of CSR Contribution: 1. a company established under section 8 of the 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 approved under 80 G of the Income Tax Act, 1961 (43 of 1961), established by the company, either singly or along with any other company; or 2. a company established under section 8 of the 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 approved under 80 G of the Income Tax Act, 1961 (43 of 1961), and has an established track record of at least three years in undertaking similar activities
