CSR Compliance Guide India FY 2025-26 and FY 2026-27 Applicability, Calculation, Implementation Agencies, Deadlines and Penalties.

Titus Kiran
13 minutes ago
3 min read

As November 2025 marks the midpoint of FY 2025-26 (1 April 2025 to 31 March 2026), companies across India are actively executing their CSR obligations for FY 2025-26 while planning budgets for FY 2026-27. With the stricter CSR-1 registration rules enforced since July 2025, selecting verified implementing agencies is more important than ever to ensure full compliance, avoid penalties, and achieve measurable social impact.

This detailed guide is designed for CSR Managers, Company Secretaries, CFOs, and compliance teams searching for CSR rules India 2025-26, CSR applicability thresholds 2026, CSR implementing agencies selection, CSR penalties FY 2025-26, and CSR filing deadlines 2026. It covers eligibility, 2% calculation, Schedule VII activities, unspent transfers, latest amendments, and practical tips for partnering with compliant NGOs.

1. CSR Applicability Thresholds (Section 135 Companies Act 2013) – FY 2025-26 & 2026-27 :

CSR applies if any one criterion is met in the preceding financial year (no changes announced as of November 2025):

Criteria	Threshold	Triggers CSR From FY
Net Worth	≥ ₹500 crore	Next FY
Turnover	≥ ₹1,000 crore	Next FY
Net Profit (before tax)	≥ ₹5 crore	Next FY

Foreign companies with India branch/project follow the same rules.

2. CSR Spend Calculation – Mandatory 2% Rule :

Obligation: Minimum 2% of average net profits (before tax) of the last 3 financial years.
Set-off allowed: Up to 5% excess spend can be carried forward for 3 succeeding FYs.
Overheads cap: 5% of total CSR expenditure.
Impact assessment: Mandatory if average CSR obligation ≥ ₹10 crore (last 3 years); cost capped at lower of 5% spend or ₹50 lakh.

Example for FY 2026-27 obligation (calculated in FY 2026-27 based on FY 2023-24 to 2025-26):

Year	Net Profit (₹ crore)
2023-24	90
2024-25	110
2025-26	120
*Average*	*107 crore*
*2% CSR*	*₹2.14 crore*

3. Key CSR Amendments 2025 (Effective July 14, 2025) :

The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2025 introduced a fully web-based revised Form CSR-1:

Mandatory for all implementing agencies (Trusts, Societies, Section 8 companies).
Requires detailed disclosures: 12A/80G certificates, 3-year track record (unless company-created), audited accounts, PAN.
Professional certification by CA/CS/CMA compulsory.
Only agencies with new CSR registration number (issued post-July 2025) can receive funds.
Existing pre-July registrations remain valid but agencies must update for new projects.

This ensures only credible entities handle CSR projects India 2025-26.

4. Permitted CSR Activities – Schedule VII (No Changes in 2025) :

Item	Focus Area	Common FY 2025-26 Projects
i	Eradicating hunger & poverty	Nutrition programs, food distribution
ii	Promoting education & skills	Rural schools, digital literacy, vocational training
iii	Gender equality & women empowerment	Skill centres for women, safe hostels
iv	Environmental sustainability	Tree plantation, water conservation, e-waste management
v	Protection of heritage & culture	Monument restoration
vi	Welfare of armed forces veterans	Housing & rehabilitation
vii	Sports promotion	Rural training facilities
viii	Rural development	Sanitation, roads, solar lighting
xi	Disaster management & relief	Contributions to PM CARES
xii	Slum redevelopment	Housing & basic amenities

Asset donations (e.g., refurbished laptops/vehicles to underprivileged) qualify under education/rural development if properly documented.

5. Unspent CSR Rules – Critical for FY 2025-26 Closure :

Project Type	Action Required by 31 March 2026
Ongoing (multi-year)	Transfer to Unspent CSR Account by 30 April 2026; utilise within 3 years
Others (annual)	Transfer to Schedule VII fund (PMNRF, Swachh Bharat, etc.) by 30 September 2026

6. Filing Deadlines – FY 2025-26 & 2026-27 :

Form	Purpose	Due Date (FY 2025-26)
CSR-2	Annual CSR report (previous FY)	With AOC-4 (typically 30 September 2026) or extended as notified
AOC-4	Financials + CSR details	29 October 2026 (post-AGM)
Board Report	CSR policy & spend summary	With AOC-4

7. Penalties for Non-Compliance :

Violation	Penalty (Company + Officer)
Non-spend without proper transfer	Company: 2× unspent amount; Officer: up to ₹2 lakh + possible imprisonment
False info in CSR-1/returns	Sections 448/449: Fine + imprisonment for false statements

8. Selecting Reliable CSR Implementing Agencies in 2025-26 & 2026-27 :

Post-July 2025 rules mandate;

Valid 12A & 80G + updated CSR-1 number
3-year proven track record
Transparent audited reports & impact measurement

Verification steps;

Cross-check on MCA CSR portal
Review utilisation certificates & past impact reports
Prefer pan-India agencies with expertise in education, environment, rural development

Many companies partner with established NGOs compliant with new rules, specialising in high-impact areas like digital education for rural students, asset redistribution (laptops/vehicles), and sustainable community projects.

Finalise Your FY 2025-26 & Plan 2026-27 CSR Now

With few months left in FY 2025-26, prioritise unspent transfers and align with verified partners for maximum compliance and impact.

Contact Marpu Foundation (80G & 12A compliant, CSR-1 registered) Website: www.marpu.org Email: connect@marpu.org Phone: +91-7997801001 (mention "CSR Partnership 2025-26" for priority response)