If a company spends more than the requirement provided under section 135, can that excess amount be set off against the mandatory 2% CSR expenditure in succeeding financial years?

Yes, a company can set off the excess amount it spends on CSR activities against the mandatory 2% CSR expenditure in succeeding financial years. This is provided under section 135(5) of the Companies Act, 2013 and rule 7(3) of the Companies (CSR Policy) Rules, 2014.

The excess amount available for set off should not include the surplus arising out of the CSR activities in pursuance of these Rules, and the Board should pass a resolution to that effect.

The following are the conditions that need to be met in order to set off the excess amount:

• The excess amount must be spent on CSR activities that are in accordance with the company's CSR policy.
• The excess amount must be spent within the financial year in which it is incurred.
• The company must pass a resolution to set off the excess amount against the mandatory 2% CSR expenditure in succeeding financial years.

If these conditions are met, the company can set off the excess amount against the mandatory 2% CSR expenditure in succeeding financial years. This will allow the company to carry forward the excess amount and use it to fund future CSR activities.

Here are some of the benefits of setting off the excess amount against the mandatory 2% CSR expenditure in succeeding financial years:

• It allows the company to use the excess amount to fund future CSR activities.
• It reduces the amount of CSR expenditure that the company needs to incur in future financial years.
• It can help the company to improve its CSR performance and reputation.