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What does section 135(5) of the Companies Act, 2013 provide about where a company should spend its CSR amount?

Question and options

What does section 135(5) of the Companies Act, 2013 provide about where a company should spend its CSR amount?

  1. It shall spend the amount only in the local area and areas around where it operates

  2. It shall give preference to districts notified as backward by the Central Government

  3. It shall give preference to the local area and areas around where it operates

  4. It shall spend at least half the amount in the State of its registered office

Answer and explanation

Correct answer: C - It shall give preference to the local area and areas around where it operates

The proviso to section 135(5) of the Companies Act, 2013 requires a company to give preference to the local area and areas around it where it operates when spending the CSR amount. It is a preference, not a restriction: spending elsewhere in India is still valid CSR.

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