How do we handle taxation on in-kind CSR contributions?

Marpu Foundation
Jul 4
2 min read

This is one of the most common questions Indian corporates ask while planning CSR projects and donations. With more companies now donating goods, services, and equipment instead of just money, clarity on tax implications is essential.

📌 What Are In-Kind CSR Contributions?

In-kind donations are non-cash contributions made by companies — such as:

Used laptops, desktops, or printers
Office furniture and fixtures
Medical supplies or books
Free professional services or manpower

These are allowed under Schedule VII of the Companies Act, if they serve a social development purpose — such as education, healthcare, or environmental sustainability.

🔍 Is In-Kind CSR Allowed as Per CSR Law?

Yes — as per MCA guidelines, in-kind support is valid if the goods or services are part of an approved CSR project and not for personal or promotional benefit.

However, the valuation and documentation of such contributions must be clear, audited, and impact-focused.

💰 What About Tax Deduction?

This is where it gets tricky:

Section 80G benefits (for tax deduction) apply only to monetary donations to eligible NGOs.
In-kind donations do not qualify for 80G deductions, but can still be reported as CSR spends under Rule 4(1) of CSR Rules — if routed properly.

Companies must:

✔ Ensure the NGO is CSR-compliant (registered on MCA portal with Form CSR-1)

✔ Submit detailed utilization certificates and asset handover documents

✔ Get a fair market valuation of the donated items

✔ Record it transparently in their Board Report and CSR disclosures

📊 Why This Matters Now

With the growing push for circular economy and sustainable CSR, many companies in India — especially in IT and manufacturing — are donating assets that still hold value.

Example: A 2023 report by NASSCOM found that over ₹350 crore worth of IT assets were donated in-kind across India — impacting over 2 lakh students and NGO workers.

✅ Best Practices for In-Kind CSR

Partner with an NGO with impact tracking systems
Use structured formats for donation records
Conduct pre- and post-donation audits
Align the donation with SDGs, such as Quality Education (SDG 4), Climate Action (SDG 13), or Industry Innovation (SDG 9)

💡 Pro Tip for CSR Teams

Before making in-kind donations, consult your finance and legal team. Use a verified NGO partner who can support you with documentation, audit support, and reporting — like those with proven experience in corporate collaborations.

To make this happen smoothly, you can collaborate with experienced organisations like Marpu Foundation NGO — which supports donation drives, documentation, and measurable impact delivery across 22 states in India.

👉 To learn more, visit www.marpu.org