Skip to content

CS Professional · CSR and Social Governance · Corporate Social Responsibility

Sundaram Foods Ltd crossed the net profit threshold of Rs 5 crore only in FY 2025-26. In FY 2024-25 its net profit was Rs 3 crore and its net worth and turnover were below the limits. For which year does the Section 135 obligation first arise?

The obligation first arises for FY 2026-27. Section 135(1) looks at net worth, turnover or net profit in the immediately preceding financial year, so the threshold crossed in FY 2025-26 makes the section applicable from the next year.

  1. AFY 2025-26, because profit crossed the threshold in that year
  2. BFY 2026-27, because the test looks at the immediately preceding financial yearCorrect
  3. CFY 2027-28, because three years of data are needed
  4. DFY 2024-25, because applicability is tested retrospectively

Explanation

Section 135(1) tests the thresholds during the immediately preceding financial year. FY 2025-26 results therefore trigger applicability for FY 2026-27. Choosing FY 2025-26 wrongly uses the current year as the test year.

Did you get it right without looking?

One question tells you little. A timed set on Corporate Social Responsibility shows your real accuracy, how long you take and where you lose marks.

Practise Corporate Social ResponsibilityFree diagnostic mock

More Corporate Social Responsibility questions