From the drafting of your CSR Policy to the closing impact assessment, we work with Boards and CSR Committees across each stage that Section 135 and the CSR Rules now require.
Drafting the Board-approved CSR Policy with activity scope aligned to Schedule VII, alongside the multi-year strategic direction that defines thematic focus areas, geographic priorities, beneficiary profiles, and the outcomes the Board wishes the contribution to achieve.
Translating strategy into the Annual Action Plan required under Rule 5(2) of the CSR Rules, including programme design, theory of change, budget allocation across projects, and target outcomes for the financial year.
Shortlisting and due diligence of implementing agencies, including Section 8 companies, registered trusts, and registered societies, under the revised Form CSR-1 framework effective 14 July 2025.
Operational systems for programme execution, including standard operating procedures, milestone-based fund release controls, and governance protocols that keep the CSR Committee informed without involving it in daily decisions.
Field validation visits, management information dashboards, quarterly review meetings, and the third-party impact assessment mandatory under Rule 8(3) for companies with average CSR obligation of ten crore rupees or more.
Reporting and disclosure across the required formats: the CSR section of the Board Report, Form CSR-2 inputs filed alongside AOC-4, BRSR-aligned narratives for listed entities, and the website disclosure required under the CSR Rules.
With the 2025 amendments raising documentation standards for implementing agencies and third-party impact assessment now mandatory for larger CSR spends, the demands on Boards and CSR Committees have grown materially.
We confirm Section 135 applicability against your financial thresholds, compute the two per cent obligation on the three-year average of net profits as defined under Section 198, and identify any set-off eligibility under Rule 7(3) from earlier years.
We confirm Section 135 applicability against your financial thresholds, compute the two per cent obligation on the three-year average of net profits as defined under Section 198, and identify any set-off eligibility under Rule 7(3) from earlier years.
We draft the CSR Policy for Board approval, define thematic focus and geographic priorities for the multi-year programme, and prepare the Annual Action Plan required under Rule 5(2) of the CSR Rules.
We draft the CSR Policy for Board approval, define thematic focus and geographic priorities for the multi-year programme, and prepare the Annual Action Plan required under Rule 5(2) of the CSR Rules.
We shortlist implementing agencies aligned to your strategy, verify their Form CSR-1 registration under the revised framework, and conduct due diligence on track record, governance, and statutory standing.
We shortlist implementing agencies aligned to your strategy, verify their Form CSR-1 registration under the revised framework, and conduct due diligence on track record, governance, and statutory standing.
We define the theory of change for each project, set monitoring indicators, structure fund release against milestones, and establish the reporting cadence the CSR Committee will rely on through the year.
We define the theory of change for each project, set monitoring indicators, structure fund release against milestones, and establish the reporting cadence the CSR Committee will rely on through the year.
We conduct field validation visits, review the management information dashboards, flag deviations early, and commission third-party impact assessment where the Rule 8(3) threshold applies.
We conduct field validation visits, review the management information dashboards, flag deviations early, and commission third-party impact assessment where the Rule 8(3) threshold applies.
We prepare the CSR section of the Board Report, draft Form CSR-2 for filing alongside AOC-4, support BRSR-aligned disclosures for listed entities, and refresh the website disclosure required under the CSR Rules.
We prepare the CSR section of the Board Report, draft Form CSR-2 for filing alongside AOC-4, support BRSR-aligned disclosures for listed entities, and refresh the website disclosure required under the CSR Rules.
Corporate Social Responsibility under Section 135 of the Companies Act, 2013 requires qualifying companies to spend on notified social activities. A company must comply if, in the immediately preceding financial year, it had a net worth of Rs 500 crore or more, turnover of Rs 1,000 crore or more, or net profit of Rs 5 crore or more. Meeting any one of the three thresholds triggers the obligation. We review your financials against these limits and confirm whether CSR applies for the year.
Yes. Section 135 applies to every company that meets the financial thresholds, including private limited, public, holding, and subsidiary companies. A foreign company with a branch or project office in India is also covered where its India operations meet the limits. The form of the company does not change the obligation; the financial thresholds do. For a group, we assess applicability for each entity separately rather than assuming it follows the parent.
A company within Section 135 must spend at least 2% of the average net profit of the three immediately preceding financial years. Net profit is computed under Section 198 of the Companies Act, which differs from the profit in the statement of profit and loss because it excludes items such as certain capital profits and the set-off of past losses. Where a company has been in existence for fewer than three years, the average is taken over the years available. We compute the obligation and document the basis.
Applicability is tested against the immediately preceding financial year, so a company can move into or out of CSR as its financials change. A company that ceases to meet every threshold is not required to spend or to maintain a CSR Committee until it meets a threshold again. We re-test applicability each year, so the obligation reflects current financials rather than a single past check.
A company to which CSR applies generally constitutes a CSR Committee of the Board with three or more directors, of which at least one is an independent director where the company is otherwise required to have one. A private company with only two directors may form the committee with those two, and an unlisted company that need not appoint an independent director need not include one. Where the amount to be spent in a financial year does not exceed Rs 50 lakh, a CSR Committee is not required and the Board itself performs its functions.
The Board approves a CSR Policy that sets out the activity scope drawn from Schedule VII, supported by an Annual Action Plan under Rule 5(2) of the CSR Rules. The Annual Action Plan lists the approved projects for the year, the manner of execution, the modalities of fund use and implementation schedules, the monitoring and reporting mechanism, and the need for impact assessment where it applies. We draft both for Board approval and align them with the company's thematic and geographic priorities.
CSR projects must fall within the activities listed in Schedule VII, which include eradicating hunger and poverty, promoting education, gender equality, environmental sustainability, healthcare, and rural development, among others. Activities undertaken in the normal course of business, those benefiting only the company's employees, contributions to political parties, and spend outside India other than training of Indian sports personnel do not count as CSR. We map each proposed project to a Schedule VII entry before it is approved.
A company can carry out CSR directly or through an implementing agency such as a Section 8 company, a registered public trust, or a registered society. Since 1 April 2021, an implementing agency must be registered with the Ministry of Corporate Affairs through Form CSR-1 and hold a CSR registration number, and the eForm was revised with effect from 14 July 2025. Registration generally requires valid Section 12AB [ITA 2025: s. 332] registration and Section 80G [ITA 2025: s. 354] approval, together with a track record of activity. We verify a partner's CSR-1 status and statutory standing before any funds are committed.
The treatment depends on whether the money relates to an ongoing project. For an ongoing project, the unspent amount is transferred to a separate Unspent CSR Account in a scheduled bank within 30 days of the financial year end and must be spent within three financial years; any balance after that moves to a fund specified in Schedule VII. For amounts not linked to an ongoing project, the company transfers the unspent sum to a Schedule VII fund within six months of the year end. We track these timelines so transfers are made on time.
Yes, within limits. Under Rule 7(3) of the CSR Rules, a company that spends more than its required 2% in a financial year may set off the excess against the obligation of up to the three succeeding financial years, subject to a Board resolution and provided the excess does not include surplus arising from CSR activities. We record the excess and the set-off so the carry-forward is supported if it is later reviewed.
Impact assessment is mandatory for a company whose average CSR obligation is Rs 10 crore or more in the three immediately preceding financial years. It applies to projects with an outlay of Rs 1 crore or more that have completed at least one year before the assessment is undertaken, and it must be carried out by an independent agency. The company may book the cost of impact assessment as CSR spend, up to 2% of total CSR expenditure for the year or Rs 50 lakh, whichever is higher. We scope and commission the assessment where the threshold applies.
A covered company discloses its CSR in the Board Report in the format prescribed under the CSR Rules, files Form CSR-2 with the Ministry of Corporate Affairs as an addendum to the financial statements after Form AOC-4, and makes the CSR disclosure required on its website. Listed companies also align their CSR narrative with the Business Responsibility and Sustainability Report. The Form CSR-2 due date follows the AOC-4 filing and has been set and extended by MCA circular from year to year, so we confirm the current year's date before filing.
Where a company fails to transfer unspent CSR amounts as required, Section 135(7) provides a penalty on the company of twice the amount that should have been transferred to the Unspent CSR Account or a Schedule VII fund, or Rs 1 crore, whichever is less. Each officer in default faces a penalty of one-tenth of that amount, or Rs 2 lakh, whichever is less. Timely spending, transfer, and disclosure keep a company outside these provisions, which is the focus of our monitoring.
Generally no. CSR expenditure described in Section 135 of the Companies Act shall not be deemed to have been incurred for the purposes of business or profession under Section 37(1), Explanation 2 [ITA 2025: s. 34(2)(b)], so it is not allowed as a general business deduction. A contribution may instead qualify under Section 80G [ITA 2025: s. 133] only where the recipient, payment and other statutory conditions are satisfied; certain contributions to specified government funds within Schedule VII may qualify, while specified Section 80G [ITA 2025: s. 133] entries exclude sums spent in pursuance of CSR. CSR treatment alone therefore does not establish deductibility. We flag where a contribution may carry a tax benefit rather than assume one. This is general information and not tax advice for a specific case.