Corporate Social Responsibility Rules
Question
With reference to Corporate Social Responsibility (CSR) rules in India, consider the following statements: Which of the statements given above is/are correct?
- 1.
CSR rules specify that expenditures that benefit the company directly or its employees will not be considered as CSR activities.
- 2.
CSR rules do not specify minimum spending on CSR activities.
Options
1 only
2 only
Both 1 and 2
Neither 1 nor 2
Explanation
Statement 1 is correct; the Companies (CSR Policy) Rules explicitly exclude activities that solely benefit the employees of the company and their families from qualifying as CSR. Statement 2 is incorrect; Section 135 of the Companies Act legally mandates a minimum spending of 2% of the average net profits made during the three immediately preceding financial years.
Answer: (a).
Question details
Year
2024
Paper
GS Paper 1
Question
Q50
Subject
Economy
Sub-topic
Industry, MSME & Services
Type
Statement-based
Difficulty
Medium
Nature
Static
Source hint
Companies Act 2013
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