Are CSR Contributions Eligible for Tax Deduction?
Author: CS Pradeep Kumar Parakh Executive Summary The question of whether Corporate Social Responsibility (CSR) contributions qualify for tax deductions under Section 80G of the Income Tax Act, 1961, has been a point of considerable debate among corporations and their CSR implementing partners. Specifically, many ask whether companies that undertake CSR activities as mandated by the Companies Act, 2013, can claim deductions under Section 80G if those contributions are made to institutions or projects with 80G certification. This issue was addressed recently in a significant ruling by the Income Tax Appellate Tribunal (ITAT) in its order dated November 28, 2023. In the case of Rustomjee Realty Private Limited (Appeal Number: ITA No.1585/Mum/2023, Assessment Year 2020-21) , the ITAT upheld the company's right to claim a deduction under Section 80G for its CSR expenses. The ruling clarified that CSR expenditures, while mandatory under the Companies Act, are not excluded from eligibil...