Understanding CSR Law and the 2% Mandate in India with Sparkle Gift Cards
20 June, 2024
Imagine you work for a company that's doing well, really well. They make a lot of money, but with that success comes a responsibility to give back to the community and improve the world around them. That's where the idea of Corporate Social Responsibility (CSR) comes in.
In India, on April 1, 2014, a law which is the first of its kind was mandated for companies with a certain turnover and profitability. Under section 135 of the Companies Act, 2013 firms meeting specific turnover and profitability thresholds are required to allocate 2% of their average net profit from the previous three years for CSR activities. The focus of the activities were to be on hunger and poverty, education, health, gender equality and woman empowerment, skills training, environment, social enterprise projects and promotion of rural and national sports. The government monitors the CSR provisions compliance through the disclosures made by the companies on the MCA portal.
Section 135 applies to every company registered under the Indian Companies Act that (1) is a private or public company or a subsidiary of a foreign company and (2) has a net worth of INR 5 billion (INR 500 crore) or more, a turnover of INR 10 billion (INR 1000 crore or more), or a net profit of INR 50 million rupees (INR 5 crore or more) during the preceding financial year.
Source:- https://www.icnl.org/wp-content/uploads/India-FAQ-3---Corporate-Social-Responsibility-FINAL.pdf
The average net profit to determine the spending on CSR activities is to be computed as per the provisions of Section 198 of the Act and be exclusive of the items given under Rule 2(1)(h) of the Companies (CSR Policy) Rules, 2014. Section 198 of the Act specifies certain additions/deletions (adjustments) to be made while calculating a company’s net profit. It mainly excludes capital payments/receipts, income tax and set-off of past losses. The surplus arising from the CSR activities will have to be utilised only for CSR purposes. CSR activities can be taken place locally or keeping the national priority in mind.
Source:- https://cleartax.in/s/corporate-social-responsibility
Here's the thing, though – Sparkle Gift Cards have partnered with NGOs in different genres as per the UN SGDs. The person receiving the Sparkle Gift Card gets to decide which NGO benefits! They can pick a cause they're passionate about, like education for children, healthcare for those in need, or care for environment and animals. This way, the gift you give is personal and meaningful.
But it's not just good for the recipient; it's great for companies too. By giving Sparkle Gift Cards as part of their CSR efforts, companies can show their employees and the community that they care. They're not just throwing money at a problem; they're letting people choose how to make a real difference. Plus, Sparkle Gift Cards only work with trusted charities, so you can be sure the money is going to a good cause.
So, the next time you're thinking about giving back, consider the power of Sparkle Gift Cards. It's a way to turn a gift into something that can truly change the world, one good deed at a time.
To know more about the CSR law and its implications please read
https://www.csr.gov.in/content/csr/global/master/home/aboutcsr/csr-legislation.html
