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CS Professional · CSR and Social Governance · Guidelines on CSR

Tarang Steel Ltd spent more than its required CSR amount in FY 2026-27. Which statement is correct under section 135(5)?

The company may set off the excess amount against its CSR spending requirement for succeeding financial years, in the manner and for the number of years prescribed, as permitted by the third proviso to section 135(5).

  1. AThe excess is lost and cannot be used again
  2. BThe excess must be refunded to shareholders
  3. CThe company may set off the excess against the requirement for succeeding financial years, in the prescribed mannerCorrect
  4. DThe excess may be set off only against the penalty for default

Explanation

The third proviso to section 135(5) allows a company that spends in excess of the requirement to set off the excess against its spending requirement for such number of succeeding financial years and in such manner as may be prescribed. It is not a penalty offset or refund.

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