Corporate Social Responsibility (CSR) Compliance: Applicability, Activities, and Registration Process

Corporate Social Responsibility (CSR) is no longer just a voluntary initiative—it is a statutory obligation for companies that meet specific financial criteria under the Companies Act, 2013. With a focus on sustainable and inclusive growth, CSR encourages businesses to contribute toward social, economic, and environmental development.

This blog outlines the applicability, permitted activities, and registration process involved in implementing CSR activities under Indian law.

  • Applicability of CSR under Section 135

Section 135 of the Companies Act, 2013 mandates companies falling under any of the following financial thresholds to spend 2% of their average net profit from the three immediately preceding financial years on CSR activities in India:

  • Net worth of ₹500 crores or more, or
  • Turnover of ₹1,000 crores or more, or
  • Net profit of ₹5 crores or more

These CSR activities can be undertaken by the company itself or outsourced to eligible NGOs, Section 8 Companies, registered Trusts, or Societies. To qualify for receiving CSR funds, these entities must register with the Ministry of Corporate Affairs (MCA) by filing Form CSR-1, which came into effect on April 1, 2021.

  • Permitted CSR Activities under Schedule VII

The Companies Act, 2013 outlines a comprehensive list of CSR activities that are permissible, as specified in Schedule VII. These include:

  1. Eradicating hunger and poverty, promoting health care including sanitation and safe drinking water.
  2. Enhancing education, including vocational training and livelihood enhancement.
  3. Promoting gender equality, establishing homes for women, orphans, and senior citizens.
  4. Ensuring environmental sustainability, including protection of flora, fauna, and natural resources.
  5. Preservation of national heritage, arts, and culture, including restoration projects and promoting traditional crafts.
  6. Support for armed forces veterans, war widows, and their dependents.
  7. Promotion of rural and national-level sports, including Olympic and Paralympic sports.
  8. Contributions to PM National Relief Fund, PM-CARES Fund, or other government welfare funds.
  9. Funding for incubators or R&D projects in science, technology, and medicine by approved institutions.
  10. Grants to public-funded universities, IITs, and government labs working towards Sustainable Development Goals (SDGs).
  11. Implementation of rural development and slum area development projects.
  12. Disaster management, including relief, rehabilitation, and reconstruction.

Note: Contributions to any fund not specified in Schedule VII will not qualify as CSR expenditure.

  • Filing Form CSR-1: Mandatory Registration for NGOs

To streamline CSR implementation and monitoring, the Ministry of Corporate Affairs (MCA) requires all eligible entities seeking CSR funds to register by filing Form CSR-1 electronically.

  • Who Should File Form CSR-1?

Entities eligible to receive CSR funds must fall under one of the following categories:

  • Section 8 company, registered trust, or registered society established by the company, with 12A and 80G registration.
  • Section 8 company, trust, or society established by the Central or State Government.
  • Statutory bodies formed under an Act of Parliament or State Legislature.
  • Any other eligible entity (Section 8 company, trust, or society) with a track record of at least 3 years in similar activities.

These entities must obtain a unique CSR Registration Number from the Registrar of Companies (RoC) via Form CSR-1 before they can receive CSR funds.

Corporate Social Responsibility (CSR) is not just a regulatory requirement—it’s a structured way for companies to make a lasting impact on society. However, navigating the legal framework under Section 135 of the Companies Act, 2013, understanding the eligible activities under Schedule VII, and ensuring proper registration through Form CSR-1 requires careful attention to compliance.

At AKMD & Associates, we specialize in providing comprehensive assistance in all matters related to CSR compliance. Whether you are:

  • A company evaluating your CSR obligations,
  • An NGO or Section 8 company seeking registration under Form CSR-1,
  • Or a corporate entity looking to structure and implement CSR projects through eligible bodies,

We offer end-to-end support to ensure smooth, compliant, and effective execution of CSR responsibilities.

Let us help you align your CSR vision with legal requirements and create meaningful social impact.