IAI Actuarial Core Principles · Business Finance · Ethical responsibilities of owners and managers
Under Indian company law as generally taught, a company meeting the prescribed net worth, turnover or profit thresholds must spend a minimum share of its average net profit of the preceding years on CSR. What is that minimum percentage?
The minimum CSR spend for qualifying Indian companies is 2% of the average net profit of the preceding three financial years. Companies meeting the net worth, turnover or profit thresholds must follow this rule, with unspent amounts subject to transfer or disclosure requirements.
- A1%
- B2%Correct
- C5%
- D10%
- 0.5%
Explanation
The Companies Act, 2013 CSR provisions require qualifying companies to spend at least 2% of average net profit of the immediately preceding three financial years on CSR activities. The other percentages are not the statutory minimum.
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