CSR Law & Provisions
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CSR Law & Provisions
CSR Law & Provisions
Corporate Social Responsibility (CSR) in India is governed by Section 135 of the Companies Act, 2013, along with the CSR Rules, 2014. CSR provisions apply to companies with a net worth of ₹500 crore, turnover of ₹1,000 crore, or net profit of ₹5 crore or more in the preceding financial year.
Eligible companies must spend at least 2% of their average net profits from the last three financial years on activities listed under Schedule VII, such as education, healthcare, environment, and rural development. Companies must form a CSR Committee to oversee policy formulation, project selection, and monitoring.
Mandatory disclosures include reporting in the Board’s Report, filing Form CSR-2, and publishing the CSR policy online. Non-compliance may result in penalties.
CSR Committee
Companies falling under CSR applicability are required to constitute a CSR Committee of the Board, comprising:
At least three directors (with at least one independent director), or
In case of a private company, two or more directors
The CSR Committee is responsible for:
Formulating and recommending the CSR Policy
Recommending CSR activities and budgets
Monitoring CSR implementation
Ensuring compliance and reporting to the Board
Permissible CSR Activities
CSR activities must fall within the areas specified under Schedule VII of the Companies Act, including:
Education and skill development
Eradicating hunger and poverty
Healthcare and sanitation
Gender equality and women empowerment
Environmental sustainability
Rural development projects
Contributions to PM CARES Fund, disaster relief, and more
Reporting and Disclosures
Companies must disclose CSR activities and expenditure in:
The Board’s Report, as part of the Director’s Report
Filing Form CSR-2 with the Registrar of Companies annually
Publishing the CSR Policy on the company website