September 2025
Corporate Social Responsibility (CSR) Obligation – Whether Day 1 Obligation?
By Dolphy D’souza, Chartered Accountant
Reading Time 10 mins
INTRODUCTION
The main provisions of section 135 of Companies Act, 2013, as amended, can be summarised as follows:
- Every company having net worth of r 500 crore or more, or turnover of r 1,000 crore or more or a net profit of r 5 crore or more during the immediately preceding financial year is required to spend 2% of the average net profit of the Company made in the immediately preceding 3 years on CSR activities as specified in the relevant schedule.
- Earlier, in case of unspent CSR amount, Board of Directors were required to specify the reason for not spending the amount in the Board Report.
- Basis subsequent amendments notified in official Gazette, in case of unspent CSR amount, the Companies are required to transfer unspent CSR amount in a separate government fund within six months of the expiry of the financial year, unless that unspent amount pertains to ongoing CSR projects.
- In case of unspent CSR amount pertaining to ongoing CSR project, the Companies are required to transfer such amount within a period of 30 days from the end of the financial year to a special account opened with a scheduled bank called as Unspent Corporate Social Responsibility Account and such amount shall be spent by the Company within a pe
