Clarification on CSR funds for COVID–19

Considering the spread of novel Coronavirus (COVID-19) in India, the Ministry of Corporate Affairs (MCA) has announced that spending of

corporate social responsibility funds (CSR funds) for COVID-19 is an eligible CSR activity of a company. The Government further clarified that spending CSR funds for carrying out awareness campaigns/programs on COVID 19 vaccination would be considered as the corporate social responsibility (CSR) activity of firms.

Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR) defines as an organization’s sense of responsibility towards the environment (both ecological and social) and community in which it operates. Companies can fulfill this responsibility by contributing to CSR funds. Considering the spread of novel Coronavirus in India and the World Health Organization (WHO) declaration of COVID-19 as a pandemic, the central Government of India has decided to treat Coronavirus (COVID-19) as a notified disaster. Hence, the funds spent on measures to tackle the Covid-19 outbreak and the funds spent for carrying out awareness campaigns/programs on COVID 19 vaccination would be considered as the corporate social responsibility (CSR) activity of firms.

Contribution to awareness campaigns on COVID–19 Vaccination

The funds spent on various activities related to COVID-19 vaccination awareness campaigns/programs on the promotion of healthcare; including preventive healthcare and sanitation will be considered as the company’s CSR obligations. The official notification of MCA related to the Clarification on CSR funds for COVID–19 is as follows:

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Governing Law

The Corporate Social Responsibility concept in India is governed by Section 135 of the Companies Act, 2013 wherein the criteria has been provided for assessing the CSR eligibility of a company, Implementation, and Reporting of their CSR Policies.

Applicability of CSR Provision

According to the

Companies Act 2013, certain classes of profitable organizations have to shell out at least 2 percent of the three-year annual net profit towards Corporate Social Responsibility (CSR) activities in a particular financial year. The companies having the following net-worth during the immediately preceding financial year can make CSR expenditure for COVID – 19 under Section 135 of the Companies Act, 2013, every company having

The net worth of Rs. 500 Crore or more
Turnover of Rs. 1000 crore or more
Net Profit of Rs. 5 crores or more

foreign corporation having its branch office or project office in India, which fulfills the criteria mentioned above can also make the Corporate Social Responsibility for COVID – 19 vaccination awareness program.

National CSR Data Portal

The National Corporate Social Responsibility Data Portal is an initiative by the Ministry of Corporate Affairs, Government of India to establish a platform to disseminate Corporate Social Responsibility related data and information filed by the companies registered with it As mentioned above, for CSR contribution, the Government of India established this portal on which specific requirements such as equipment, medicines, will be posted, and the company may be permitted to contribute CSR funds in cash or kind towards those particular requirements. In the new fiscal year, a significant portion of the CSR funds can transfer to the CSR fund without upsetting commitments to ongoing projects

Modification of Schedule VII of Companies Act, 2013 for COVID – 19

Because of the spread of the novel Corona Virus in India, the Ministry of Corporate Affairs amends Schedule VII under Section 135 of the Companies Act, 2013. According to the Schedule VII of the Companies Act, Corporate Social Responsibility Policies activities are as follows:

Eradicating extreme hunger and poverty
Promotion of education
Promoting gender equality and empowering women
Producing child mortality and improving maternal health
Combating human immunodeficiency virus (HIV), acquired immune deficiency syndrome, malaria, and any other diseases
Employment enhancing vocational skills
Ensuring environmental sustainability
Social business project
Contribution to the National Relief fund of Prime Minister or any other relief fund set up by the Government of India
Government for socio-economic development and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities, and women

Along with these activities, the Government has included disaster management, including relief, rehabilitation, and reconstruction activities as Corporate Social Responsibility (CSR) Activities. The official notification of the Ministry of Corporate Affairs regarding the changes in the Corporate Social Responsibility (CSR) Activities is as follows:

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Frequently Asked Questions

Common questions about CSR Fund Allocation for COVID.

The Ministry of Corporate Affairs (MCA) has announced that spending CSR funds for COVID-19 relief and awareness campaigns/programs related to COVID-19 vaccination is considered an eligible CSR activity. This allows companies to contribute towards tackling the pandemic through their CSR obligations.

According to the notification, funds spent on measures to tackle the COVID-19 outbreak, such as relief efforts, and funds spent on carrying out awareness campaigns/programs on COVID-19 vaccination, are considered valid CSR activities under the Companies Act.

The Corporate Social Responsibility concept in India is governed by Section 135 of the Companies Act, 2013. This section provides criteria for assessing a company's CSR eligibility, implementation, and reporting of their CSR policies.

Companies with a net worth of Rs. 500 crore or more, a turnover of Rs. 1000 crore or more, or a net profit of Rs. 5 crores or more during the immediately preceding financial year are required to spend at least 2% of their average net profit on CSR activities.

Yes, foreign corporations having a branch office or project office in India, which fulfill the criteria mentioned in the Companies Act, can also make CSR contributions for COVID-19 vaccination awareness programs.

The National CSR Data Portal is an initiative by the Ministry of Corporate Affairs to establish a platform for disseminating CSR-related data and information filed by registered companies. It may also be used to facilitate CSR contributions for specific COVID-19 requirements.

The Ministry of Corporate Affairs has amended Schedule VII under Section 135 of the Companies Act, 2013, to include disaster management, including relief, rehabilitation, and reconstruction activities, as valid CSR activities. This allows companies to contribute to COVID-19 relief efforts under their CSR obligations.

Other CSR activities listed under Schedule VII include eradicating poverty, promoting education, gender equality, child and maternal health, combating diseases, enhancing vocational skills, environmental sustainability, social business projects, and contributions to government relief funds.

According to the Companies Act, eligible companies must spend at least 2% of their average net profit from the preceding three financial years on CSR activities.

Yes, the notification suggests that in the new fiscal year, a significant portion of CSR funds can be transferred to the CSR fund without affecting commitments to ongoing projects, allowing companies to contribute to COVID-19 relief efforts.