The obligation
Section 135,
Section 135,
Companies Act, 2013
CSR DIODE360° approach
Whether it applies to you, what you must spend it on, and what happens if you don't. We confirm the position for your company before any work begins.
The obligation
Section 135, Companies Act, 2013
Whether it applies to you, what you must spend it on, and what happens if you don't. We confirm the position for your company before any work begins.
Does it apply
Yes, if in the immediately preceding financial year the company had net worth of ₹500 crore or more, turnover of ₹1,000 crore or more, or net profit of ₹5 crore or more.
s.135(1)
How much
At least 2% of the average net profits of the three immediately preceding financial years.
s.135(5)
CSR committee
Required if the amount to be spent exceeds ₹50 lakh. At ₹50 lakh or less, the board carries out the committee's functions.
s.135(9)
What counts
Activities listed in Schedule VII. Not counted: activities in the normal course of business, activities benefiting only employees, political contributions, and sponsorship for marketing.
Sch. VII; r.2(1)(d)
Overheads
Administrative overheads are capped at 5% of the year's CSR spend.
r.7(1)
Partners
Since 1 April 2021 an implementing agency must be registered with the MCA via Form CSR-1. Most NGO partners also need registration under sections 12A and 80G of the Income Tax Act, 1961.
r.4(1),(2)
Impact assessment
Required where the average CSR obligation over the three preceding financial years is ₹10 crore or more, for projects of ₹1 crore or more completed at least a year earlier, by an independent agency.
r.8(3)
Penalty
For failing to transfer unspent money as required: twice the amount to be transferred, or ₹1 crore, whichever is less.
s.135(7)
Updated October 2026 · general information, not legal advice