What is CSR and explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Corporate Social Responsibility (CSR) requires certain companies to spend a portion of their profits on social causes. Here is who it applies to and how it works.
Applicability (Section 135)
- Net worth of ₹500 crore or more, OR
- Turnover of ₹1,000 crore or more, OR
- Net profit of ₹5 crore or more, in the immediately preceding financial year
CSR obligation
- Spend at least 2% of the average net profit of the last 3 years on CSR
- Constitute a CSR committee and adopt a CSR policy
- Spend on activities listed in Schedule VII (education, health, environment, etc.)
Reporting
Unspent CSR must be transferred to a specified fund/account, and CSR details disclosed in the board report; implementing agencies must register in Form CSR-1.
Frequently Asked Questions
Which companies must do CSR?
Those with net worth ≥₹500 crore, turnover ≥₹1,000 crore, or net profit ≥₹5 crore.
How much must be spent on CSR?
At least 2% of the average net profit of the last three financial years.
What is Section 135?
The Companies Act section governing CSR obligations.
What happens to unspent CSR?
It must be transferred to a specified fund or an unspent CSR account.
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