CSR stopped being optional years ago — for companies meeting the thresholds, 2% of average net profits must be spent, with a committee, a policy, and disclosures that increasingly get read. We run CSR as a managed programme: compliant on paper, credible in practice, and genuinely useful to someone.
Section 135 of the Companies Act requires companies meeting prescribed net worth, turnover, or profit thresholds to spend 2% of their average net profits of the last three years on CSR activities — through a board-level CSR committee, under a board-approved policy, on activities in Schedule VII, with annual reporting in the board's report.
The regime has teeth now: unspent amounts have statutory treatment (transfer to specified funds or special accounts with timelines), ongoing projects have their own rules, and disclosures are granular. CSR non-compliance is no longer a footnote — it's a board-level liability.
Companies meeting the Section 135 thresholds — ₹500 crore net worth, ₹1,000 crore turnover, or ₹5 crore net profit. Many companies trip the profit threshold unexpectedly in a good year and discover CSR obligations they hadn't planned for.
Boards that want CSR to mean something beyond compliance — the programme can be a genuine asset (employer brand, community relationships, ESG narrative) or a box-ticking exercise that everyone resents. The compliance cost is the same; the design determines which one you get.
Groups where multiple entities trigger CSR separately — the obligations multiply, and a coordinated group programme is more efficient and more impactful than fragmented spending.
We confirm whether you trigger Section 135 and compute the exact spend obligation — average net profits under the prescribed formula, which differs from accounting profit in ways that matter. No surprises in March.
CSR committee constitution, board-approved CSR policy, and the governance rhythm — meetings, approvals, monitoring. The scaffolding the law requires, built properly.
Identifying credible implementing agencies, verifying their track record and 80G/12A credentials, structuring the engagement. The difference between money spent and money that reaches someone is diligence.
Disbursement management, utilisation tracking, and ongoing-project treatment. Unspent amounts handled per the statutory framework — special accounts, specified funds, timelines — not discovered as a problem at year-end.
Annual CSR reporting in the board's report, website disclosures, and the impact assessment where applicable. Written to be read, not just filed.
Annual programme management, fixed-fee, scaled to spend size and project count. Setup (committee, policy, project pipeline) is a one-time phase; ongoing management is annual.
The CSR year should be planned in Q1, not salvaged in Q4. March spending sprees are how money gets wasted and compliance gets shaky.
Discovering the unspent balance in February and spraying it at whoever will take it. This is how CSR becomes box-ticking — and how implementing-agency due diligence gets skipped. Plan the year in April.
The law prescribes exactly what happens to unspent amounts, with timelines. Getting this wrong is a direct compliance failure, not a judgement call.
Sponsorships, marketing-adjacent "social" spending, and pet projects that don't fit the Schedule VII list. If it doesn't qualify, it doesn't count — and the shortfall is real.
Applicability, obligation computation, current-state review.
Committee, policy, project pipeline, agency diligence.
Disbursements, monitoring, utilisation tracking through the year.
Annual report, disclosures, impact documentation. The year, evidenced.
On average net profits of the last three financial years, computed per the prescribed formula — which adjusts accounting profit in specific ways. We compute it precisely.
Activities in Schedule VII — education, healthcare, environment, rural development, and others listed. The activity must fit the Schedule; intent alone doesn't qualify.
Unspent amounts have statutory treatment: transfer to a special "Unspent CSR Account" or specified funds, with timelines. It's structured, not optional.
Yes, with conditions — the foundation needs the track record and registrations the rules require. We structure this properly.
Companies above prescribed CSR spend thresholds must conduct impact assessments for large projects. We scope and coordinate these.
Committee, policy, and a spending plan — quickly but properly. First-year CSR is where most mistakes happen; get the scaffolding right.
Legally risky and reputationally toxic — related-party CSR invites scrutiny from every direction. Keep it arm's length.
Not as a deduction — CSR expenditure is specifically disallowed (with narrow exceptions like PM CARES). Budget it as an after-tax cost.
Yes — excess can be set off against future obligations within prescribed limits. But you can't bank it indefinitely.
Committee minutes, policy, project approvals, utilisation certificates, and impact assessments where applicable. CSR without a paper trail is just spending.
Talk to a partner about your situation — no pitch, no obligation. If we're not the right firm for it, we'll tell you that too.
Request a consultation