What is CSR:- It is the expenditure to be made by every eligible company falling within the threshold towards the wellbeing of the society which is normally not in the course of the company’s business.
Eligibility to comply with CSR:-
Every company, its holding company, its subsidiary and foreign company having in the preceding financial year
Net worth > 500 cr or more
Turnover > 1000 cr or more
Net profit > 5 crore or more
Required to spend at least 2% of the average net profits of immediately 3 preceding financial year as a CSR expense.
The computation of net profit is per Section 198 of Companies Act, 2013.
ITC on CSR expenditure:- In Budget, 2023 they have clearly stated that no company can claim ITC on goods and services used in expending CSR expenses as per section 135 of companies act, 2016.