Following data was presented by a company ZZ Ltd. covered for the provisions of the Corporate Social Responsibility (CSR) under section 135 of the Company Act, 2013: Financial Year Profit before tax Income Tax under Inco

As per Section 135(5) of the Companies Act, 2013, every company covered under Section 135 is supposed to spend in every financial year at least 2% of the average net profit of the company made during the three immediately preceding financial years. Further, for the purpose of Section 135 of Companies Act, 2013, net profit shall be calculated in accordance with the provisions of Section 198 of Companies Act, 2013. As per Section 198(5) of Companies Act, 2013, Income Tax payable under Income Tax Act, 1961 will not be considered in computation of the Net Profit. Accordingly, for the financial year 2018-19 the average profit for three immediately preceding financial years will be as follows: 2017-18: ₹650 lakh 2016-17: ₹400 lakh 2015-16: ₹240 lakh Average profit will be ₹430 lakh [i.e. (650+400+240)/3 = ₹430 lakh] The total CSR expenses for the financial year 2018-19 = 2% of ₹430 = ₹8.60 lakh.