The Ministry of Corporate Affairs came out with notifications on 27 February, 2014, bringing into effect rules in relation to corporate social responsibility. They are set to come into force on 1 April, 2014. The following are some of the major changes:
- The list of permissible CSR activities provided under Schedule VII of the Companies Act is expanded.
- Contributions to political parties, whether direct or indirect, would not be considered as a CSR expenditure.
- Companies are required to continue undertaking CSR activities for 3 years even after they fall below the specified financial threshold in a particular year. Companies are permitted to allocate upto 5% of the CSR expenditure on building and developing CSR capacities.
- Certain issues that existed for public unlisted, private, and foreign companies in complying with the membership requirements of their CSR committees have been clarified.