Article by: Dr Deepashree M R, Assistant Professor, IIHMR Bangalore
Brief Overview of Corporate Social Responsibility (CSR) in India
In India, Corporate Social Responsibility (CSR) has evolved from voluntary philanthropy into a structured statutory obligation aimed at addressing national development priorities through corporate participation. Companies increasingly view CSR as a strategic business tool that integrates social and environmental concerns into core operations, creating shared value for both businesses and communities.
Proposed changes:
Corporate Laws (Amendment) Bill, 2026 (introduced but not enacted; under JPC review) proposes increasing the CSR applicability threshold based on net profit from ₹5 crore to ₹10 crore. If enacted, companies earning between ₹5–10 crore profit may be exempt from mandatory CSR spending, CSR committee requirements, and related reporting obligations. This bill is in contrast with Companies Amendment Bill, 2025.
Companies Amendment Bill, 2025 (introduced but not enacted) proposes expanding CSR applicability by lowering eligibility thresholds from a net worth of ₹500 crore, turnover of ₹1,000 crore, or net profit of ₹5 crore to ₹100 crore, ₹500 crore, and ₹3 crore respectively. This could bring an estimated 1,000–2,000 additional mid-sized companies under the CSR framework.
Impact Assessment: Cap revised from 5% of CSR expenditure to 2% of CSR spending or ₹50 lakh, whichever is higher, enabling more robust assessments.
CSR Committee Composition: Addition of a director experienced in CSR planning and implementation alongside the independent director requirement.
Unspent CSR Funds: Transfer timeline proposed to increase from 30 days to 90 days, offering greater administrative flexibility.
Points to be kept in mind for this year plan:
Review multi-year CSR commitments periodically and retain flexibility until the proposed reforms become clearer.
Monitor updates from parliament and major legal firm closely.
Strengthen CSR governance and ensure board-level oversight of CSR initiatives.
Until these amendments become law, companies must continue complying with the existing provisions of Section 135 while focusing on measurable social impact rather than mere regulatory compliance.
Brief Overview of Corporate Social Responsibility (CSR) in India
In India, Corporate Social Responsibility (CSR) has evolved from voluntary philanthropy into a structured statutory obligation aimed at addressing national development priorities through corporate participation. Companies increasingly view CSR as a strategic business tool that integrates social and environmental concerns into core operations, creating shared value for both businesses and communities.
Proposed changes:
Corporate Laws (Amendment) Bill, 2026 (introduced but not enacted; under JPC review) proposes increasing the CSR applicability threshold based on net profit from ₹5 crore to ₹10 crore. If enacted, companies earning between ₹5–10 crore profit may be exempt from mandatory CSR spending, CSR committee requirements, and related reporting obligations. This bill is in contrast with Companies Amendment Bill, 2025.
Companies Amendment Bill, 2025 (introduced but not enacted) proposes expanding CSR applicability by lowering eligibility thresholds from a net worth of ₹500 crore, turnover of ₹1,000 crore, or net profit of ₹5 crore to ₹100 crore, ₹500 crore, and ₹3 crore respectively. This could bring an estimated 1,000–2,000 additional mid-sized companies under the CSR framework.
Impact Assessment: Cap revised from 5% of CSR expenditure to 2% of CSR spending or ₹50 lakh, whichever is higher, enabling more robust assessments.
CSR Committee Composition: Addition of a director experienced in CSR planning and implementation alongside the independent director requirement.
Unspent CSR Funds: Transfer timeline proposed to increase from 30 days to 90 days, offering greater administrative flexibility.
Points to be kept in mind for this year plan:
Review multi-year CSR commitments periodically and retain flexibility until the proposed reforms become clearer.
Monitor updates from parliament and major legal firm closely.
Strengthen CSR governance and ensure board-level oversight of CSR initiatives.
Until these amendments become law, companies must continue complying with the existing provisions of Section 135 while focusing on measurable social impact rather than mere regulatory compliance.
