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A company funds an otherwise eligible education project for 200 children with disabilities, open to the public on uniform criteria. Three employees’ children qualify under those criteria and join.…

Question and options

A company funds an otherwise eligible education project for 200 children with disabilities, open to the public on uniform criteria. Three employees’ children qualify under those criteria and join. How much of the expenditure counts as CSR?

  1. The part spent on children of non-employees

  2. All of it, provided an implementing agency runs it

  3. All of it, as the scheme serves the community at large

  4. Nothing, as employees' families are among those who benefit

Answer and explanation

Correct answer: C - All of it, as the scheme serves the community at large

Rule 2(1)(d)(iv) of the Companies (CSR Policy) Rules, 2014 excludes activities benefitting the company's employees, but the Ministry of Corporate Affairs treats a programme aimed at the public as CSR even where some employees or their families benefit incidentally. No proportionate deduction is made for the employees' children here. Implementation through an agency is optional under rule 4(1) and does not change the character of the activity.

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