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Understanding CSR-2 Filing Under the Companies Act, 2013

Understanding CSR-2 Filing Under the Companies Act, 2013

In today’s time, businesses are not just meant to earn profits—they are also expected to contribute to society. That’s where Corporate Social Responsibility (CSR) plays an important role. CSR is a way for companies to contribute positively to the community and environment. In India, the Companies Act, 2013, lays down the rules for CSR activities.

What is Form CSR-2?

Form CSR-2 is a web-based form introduced by the Ministry of Corporate Affairs (MCA) for companies to report their CSR activities. Starting from the financial year 2020-21, companies that meet certain criteria must file this form annually. The goal is to maintain clarity and responsibility in how CSR funds are used.

Who Needs to File Form CSR-2?

According to Section 135(1) of the Companies Act, 2013, the following companies are required to file Form CSR-2:

  • Companies with a net worth of ₹500 crore or more
  • Companies with a turnover of ₹1,000 crore or more
  • Companies with a net profit of ₹5 crore or more

    This includes private limited companies and those undergoing business registration.

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When Should Form CSR-2 Be Filed?

For the financial year 2020-21, Form CSR-2 had to be filed separately by March 31, 2022, which was later extended to May 31, 2022. From the financial year 2021-22 onwards, the form must be filed as an addendum to Form AOC-4 or its variants. For the financial year 2023-24, the due date is December 31, 2024.

What Information is required in Form CSR-2?

Companies need to provide the following details:

  • Basic company information
  • Details of the CSR committee members
  • CSR policy and activities undertaken
  • Amount spent on CSR activities
  • Reasons for unspent CSR funds, if any

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Consequences of Non-Compliance

Failing to file Form CSR-2 can lead to penalties. Under Section 135(7) of the Companies Act, 2013, companies may face a fine of twice the amount required to be transferred to the CSR fund or ₹1 crore, whichever is less. Additionally, directors may be fined up to ₹2 lakh.

Conclusion

CSR is more than just a legal duty — it’s also a moral responsibility. By engaging in CSR activities, companies contribute to the betterment of society. Filing Form CSR-2 ensures transparency and accountability in these efforts. It’s essential for companies, including private limited companies and those undergoing business registration, to stay compliant with CSR regulations.

Why Choose E Accountax Manager?

E Accountax Manager offers expert assistance in managing CSR compliance, including the filing of Form CSR-2. Our services are tailored to meet the needs of private limited companies and MSMEs, providing virtual CFO services to ensure seamless compliance. Trust us to handle your CSR obligations efficiently and professionally.

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FAQs

1. Is CSR-2 applicable to all companies?

No, only companies meeting the criteria under Section 135(1) need to file.

2. Can a company carry forward excess CSR spending?

Yes, excess spending can be set off against future CSR obligations for up to three years.

3. What if a company fails to spend the required CSR amount?

Unspent amounts must be transferred to a specified fund within six months of the financial year-end.

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CA Jitendra Agarwal

CA Jitendra Agarwal

CA Jitendra Agarwal, a Chartered Accountant, is an experienced Income Tax Advisor with a proven track record in tax planning and compliance.

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