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Neelkamal Ltd approved an ongoing CSR project but could not spend Rs 50 lakh of the amount by the end of the financial year. What must the company do under section 135(6)?

The company must transfer the unspent amount within thirty days of the financial year end to the Unspent Corporate Social Responsibility Account in a scheduled bank and spend it within three financial years. If it fails, it must transfer it to a Schedule VII Fund.

  1. ATransfer it within thirty days from the end of the financial year to the Unspent CSR Account in a scheduled bank, and spend it within three financial yearsCorrect
  2. BTransfer it to a Schedule VII Fund within six months, regardless of the project
  3. CCarry it forward in its own books indefinitely without any transfer
  4. DTransfer it to the Unspent CSR Account within one year and spend it within five years

Explanation

For unspent amounts relating to an ongoing project, section 135(6) requires transfer within thirty days from the end of the financial year to a special Unspent CSR Account in a scheduled bank, to be spent within three financial years, failing which it goes to a Schedule VII Fund. The six-month Fund transfer applies to non-ongoing project amounts.

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