india inc which now has to spend on corporate social responsibility csr activities may have to bear a heavier tax burden unless the expenditure is covered by specific provisions of the income tax it act the finance bill has clarified that such spend will not be treated as business expenditure if it were treated as business expenditure it would have directly reduced the taxable profits of the concerned company however tax benefits could be available for certain csr activities under other sections of the it act if the csr expenditure is covered by the specific sections section 30 to 36 of the it act repairs depreciation expenditure on a wide variety of notified projects including skill development projects would be allowed under those sections accordingly if the company constructs a vocational training centre as a csr project then repairs depreciation at 10 insurance or interest on borrowings taken to construct such building will now be expressly allowed as deduction says punit shah cohead of tax kpmg india inc will however face challenges as projects do not get notified on a timely basis some notified projects would provide a higher tax benefit india inc may also find that making a donation is a hasslefree eligible activity the latest draft of dtc issued in april 2014 had said csr is an appropriation of the profits of a company and hence not an allowable deduction these fears have come true it would be interesting to see whether this will propel corporates to contribute to notified charitable institutions and claim 50 deduction under section 80g says sudhir kapadia national tax leader ey under section 80g of the it act the donation is deductible from the taxable income either in full or to the extent of 50 of the amount