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CS Professional · CSR and Social Governance · Corporate Social Responsibility

Kaveri Engineering Ltd opened an Unspent CSR Account for an ongoing project in the financial year 2024-25, transferring the money on 20 April 2025. It still has unspent money after completing the third financial year from the date of transfer. What must it do?

If money in the Unspent CSR Account is not spent within three financial years from the date of transfer, the company must transfer the balance to a Schedule VII Fund within thirty days from completion of the third financial year. Section 135(6) sets this thirty-day limit.

  1. ATransfer the balance to a Fund specified in Schedule VII within thirty days from the date of completion of the third financial yearCorrect
  2. BCarry the balance forward indefinitely in the same account
  3. CTransfer the balance to a Fund specified in Schedule VII within six months of the expiry of the third year
  4. DSpend it in the next year and report the reasons in the Board's report

Explanation

Section 135(6) allows three financial years from the date of transfer to spend the money. If any remains, the company must transfer it to a Schedule VII Fund within thirty days from the date of completion of the third financial year. The six-month period applies to the non-ongoing-project case in section 135(5).

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