What is required under India’s CSR law for FY 2025–26?

Marpu Foundation
Jul 2
2 min read

Every financial year brings new reporting pressures and compliance updates for CSR heads, HR managers, and legal teams. April kicks off CSR planning for FY 2025–26 — and this is the best time to ensure you're aligned with India’s CSR law and make your CSR budget truly count.

Let’s break it down in simple terms.

What the CSR Law Says (Updated for FY 2025–26)

Under Section 135 of the Companies Act, 2013, every company that meets the following thresholds must spend 2% of average net profits over the last 3 years on CSR:

₹5 crore or more net profit
₹1,000 crore or more turnover
₹500 crore or more net worth

This 2% CSR spend is mandatory — not optional. If not spent, it must be transferred to a specified government fund or CSR Unspent Account.

Important Deadlines & Documents

✔️ CSR Committee Setup: Companies must form a CSR committee (if not already done).

✔️ Annual Action Plan: To be approved by the board. Should include project goals, timelines, fund usage, and monitoring process.

✔️ CSR Reporting Format: Must be submitted in the Board’s Report (Annexure II) as per the Ministry of Corporate Affairs' format.

✔️ Impact Assessment Report: Required if the company’s CSR obligation is ₹10 crore+ in the past 3 years.

Top CSR Project Areas You Can Explore

India’s CSR law limits CSR activities to the Schedule VII list, but it's broad enough to include:

Education & School Infra (SDG 4)
Environment & Climate Action (SDG 13, 15)
Health & Sanitation (SDG 3)
Rural Development
Skilling and Livelihoods
Water Conservation & Access (e.g., Jal Jugaad-type projects)

Most companies in India now prefer employee volunteering models and NGO collaborations that offer visibility and scale.

NGO Due Diligence is Now a Must

To be CSR-compliant, your implementation partner (NGO) must:

✅ Be a registered Section 8 NGO, society, or trust

✅ Be CSR Form 1 registered on MCA’s portal

✅ Have a track record in your CSR focus area

✅ Provide impact reports and be financially transparent

How CSR is Evolving in India

🔸 Corporate volunteering is gaining popularity — especially in Tier-1 cities like Bangalore, Hyderabad, and Delhi.

🔸 Thematic CSR (climate, gender, water) is rising.

🔸 Tech-enabled tracking & geo-tagged impact are expected by boards and investors.

Final Thoughts: April is the Month to Plan

Don’t wait till Q3 to scramble your CSR strategy. April to June is the ideal window to finalize NGO partners, design volunteering activities, and lock CSR goals.