Can corporations claim tax deductions for CSR expenditure?

Yes, corporations can claim deductions for expenditure incurred on Corporate Social Responsibility (CSR) activities under Section 37(1) of the Income Tax Act, 1961. However, the CSR expenditure must be towards an approved charitable cause or institution as specified under Schedule VII of the Companies Act, 2013. The deduction is allowed as a business expenditure. This position was clarified by the Bangalore ITAT in the case of Hindustan Petroleum Corporation Ltd. v. ACIT (2018) 93 taxmann.com 101. Finance Act 2025 has not made any changes to this provision.