CSR Expenses (to a section 8 Company) having common directors

[CABIJENDERKUMAR BANSAL]

Dear All

X(Assessee company)'s management incorporated a section 8 Company which is duly registered under section 80G as well as Section 12A of Income Tax Act.

Now X co.is discharging its CSR liability by contributing to this section 8 Company which is then contributing donations received to third parties such as hospitals, schools etc.

X co. and Section 8 Co. has common directors and shareholders.

Will it be covered under CSR / deduction for section 80G ?

Regards

AI Summary

Company X's CSR Donations to Section 8 Entity: Are They Eligible for Section 80G Deduction? A company, referred to as X, has incorporated a Section 8 Company, which is registered under sections 80G and 12A of the Income Tax Act. X fulfills its Corporate Social Responsibility (CSR) obligations by donating to this Section 8 Company, which then distributes the funds to third parties like hospitals and schools. Both entities share common directors and shareholders. A query was raised about whether these contributions qualify as CSR expenses or are eligible for a deduction under section 80G. One response argued they do not qualify, while another suggested they should be allowed if not benefiting employees or promoters.