Corporate Social Responsibility (CSR) Guide#
What is CSR?#
Corporate Social Responsibility (CSR) is a mandatory requirement under Section 135 of the Companies Act, 2013 for certain companies to spend a portion of their profits on social welfare activities.
CSR Eligibility Threshold#
A company must spend on CSR if it meets any one of the following conditions:
- Net worth of ₹500 crore or more
- Turnover of ₹1,000 crore or more
- Net profit of ₹5 crore or more
CSR Spending Requirement#
- Companies must spend at least 2% of their average net profit (last 3 years) on CSR activities
- Unspent CSR amount must be transferred to a designated CSR Fund
Eligible CSR Activities#
Primary Categories#
- Education - Schools, scholarships, skill development
- Healthcare - Hospitals, medical camps, disease prevention
- Environment - Tree plantation, water conservation, renewable energy
- Rural Development - Infrastructure, poverty alleviation
- Women Empowerment - Safety, skill development
- Sports - Training, infrastructure
- Arts & Culture - Heritage preservation
- Disaster Relief - Natural calamity assistance
Activities Excluded#
- Activities benefitting only company employees
- Political contributions
- Activities outside India
- Projects costing less than ₹50,000
CSR Portal - csr.gov.in#
Registration Process#
- Visit csr.gov.in
- Click on "CSR Filing"
- Register with CIN (Corporate Identity Number)
- Create company profile
- Submit CSR policy and annual action plan
Required Filings#
| Form | Due Date |
|---|---|
| CSR-1 | Within 30 days of spending |
| Annual Report | Within 60 days of AGM |
| Board Report Disclosure | In annual report |
CSR Committee#
Companies meeting CSR threshold must constitute a CSR Committee consisting of:
- At least 3 directors
- At least 1 independent director
Tax Benefits#
CSR expenditure is not deductible as business expenditure under Income Tax Act. However:
- It reduces taxable income indirectly
- Creates positive brand value
- Improves stakeholder relations
Penalties for Non-Compliance#
- Penalty: ₹25,000 to ₹5 lakh
- imprisonment up to 3 years for officers in default
- Mandatory transfer to CSR Fund of unspent amount