Corporate Social Responsibility Policy (India)
CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY
Company: [Company Name]
CIN: [CIN Number]
Registered Address: [Company Address]
Effective Date: [Effective Date]
This Corporate Social Responsibility Policy ("CSR Policy" or "Policy") is adopted by [Company Name] ("Company") pursuant to Section 135 of the Companies Act 2013, the Companies (Corporate Social Responsibility Policy) Rules 2014 (as amended by the Companies (CSR Policy) Amendment Rules 2021), and the MCA guidelines on CSR. This Policy is approved by the Board of Directors on the recommendation of the CSR Committee.
1. CSR PHILOSOPHY AND VISION
1.1 [Company Name] believes that sustainable business growth is intrinsically linked to the well-being of communities and the environment in which it operates. The Company is committed to being a responsible corporate citizen and to contributing meaningfully to India's sustainable development goals.
1.2 CSR Activities: The Company's CSR activities shall be focused on the following areas within the activities specified in Schedule VII of the Companies Act 2013: [CSR Focus Areas].
1.3 Geographic Focus: Priority shall be given to CSR activities in the State of [Governing State] and in communities in the vicinity of the Company's operations — consistent with the Ministry of Corporate Affairs' guidance that companies should focus on the local area and areas around them where they operate.
2. CSR COMMITTEE
2.1 The Board of Directors has constituted a CSR Committee comprising: Chairperson: [CSR Committee Chair]; Other Members: [CSR Committee Members].
2.2 Functions of the CSR Committee (Section 135(3), Companies Act 2013): (a) formulate and recommend this CSR Policy to the Board, indicating activities to be undertaken and the manner of execution; (b) recommend the CSR expenditure amount; (c) monitor the CSR Policy of the Company from time to time; (d) prepare a transparent monitoring mechanism for ensuring implementation of projects or programmes or activities; and (e) ensure that the activities included in the CSR Policy are related to Schedule VII of the Companies Act 2013.
2.3 The CSR Committee shall meet at least twice a year — once to recommend the annual CSR budget and project plan, and once to review mid-year progress and actual expenditure.
3. CSR BUDGET AND IMPLEMENTATION
3.1 CSR Budget: The Company shall allocate a minimum CSR budget equal to [CSR Budget Basis], calculated in accordance with Section 135(5) and Rule 2(1)(h) of the CSR Rules 2014. The CSR budget for each financial year shall be approved by the Board on the recommendation of the CSR Committee.
3.2 Unspent CSR Amount: If the Company is unable to spend the full CSR budget in a financial year: (a) for ongoing projects — unspent amounts must be transferred to a Special Account ('Unspent CSR Account') opened in a scheduled bank within 30 days of the end of the financial year; (b) for non-ongoing activities — unspent amounts must be transferred to one of the funds specified in Schedule VII (such as the PM CARES Fund or the National Clean India Fund) within 6 months of the end of the financial year. These requirements are mandatory under Section 135(6) of the Companies Act 2013 (post-2021 amendment).
3.3 Implementation Mode: [Implementation Mode]. All implementing organisations engaged by the Company must be registered under the Ministry of Corporate Affairs CSR portal (as required by the 2021 CSR Rules) and must have a valid Section 12A and 80G registration under the Income Tax Act 1961.
3.4 The Company shall not undertake CSR activities that exclusively benefit its own employees or their families.
4. MONITORING AND REPORTING
4.1 Impact Assessment: For CSR projects with an outlay of ₹1 crore or more in a single financial year, the Company shall undertake an impact assessment of the project within one year of completion of the project, through an independent agency (as required by the 2021 CSR Rules).
4.2 Annual CSR Report: The Company shall include an Annual Report on CSR Activities in its Board's Report for every financial year, in the format prescribed under Rule 8 of the CSR Rules 2014 (Annexure prescribed). The CSR Report shall disclose: (a) the CSR policy including focus areas; (b) the CSR Committee composition; (c) the CSR budget for the year; (d) actual CSR spend; (e) reasons for unspent amounts (if any); and (f) details of each CSR project.
4.3 MCA Portal Registration: All CSR projects above the prescribed threshold shall be registered on the MCA21 portal as required under Rule 9 of the CSR Rules 2014.
4.4 This Policy is governed by the laws of India and the laws of the State of [Governing State]. This Policy shall be reviewed at least annually by the CSR Committee and the Board. Material amendments shall be disclosed in the Company's Annual Report.
Chairperson, CSR Committee
________________
Signature
Managing Director / CEO
________________
Signature
What Is a Corporate Social Responsibility Policy (India)?
A Corporate Social Responsibility Policy in India records the organisation's position on the matter, defining what is permitted, what is prohibited and how breaches are handled.
Section 135(5) of the Companies Act 2013 requires eligible companies to spend at least 2% of their average net profits of the three immediately preceding financial years on CSR activities specified in Schedule VII. India is among a small number of countries globally where a minimum CSR spend is legally mandated (alongside Rwanda and Indonesia). The total mandatory CSR spending by Indian companies exceeds ₹20,000 crore annually, making the Indian CSR framework one of the largest mandatory social investment programmes in the world.
The 2021 amendments to the CSR Rules significantly strengthened the regulatory framework: introducing the concept of 'ongoing projects' with multi-year tracking, mandating transfer of unspent CSR funds to specified accounts within statutory deadlines, making impact assessment mandatory for large projects, capping administrative overheads, and requiring registration of implementing agencies on the National CSR Data Portal.
A CSR Policy documents the company's CSR Committee composition, the CSR vision and focus areas (mapped to Schedule VII and the Sustainable Development Goals), the implementation model (direct or through implementing agencies), the budget and spend monitoring procedure, the impact assessment framework, and the annual reporting obligations under the Companies Act 2013.
The legal framework governing the Corporate Social Responsibility Policy (India) in India draws on several key statutes and regulatory bodies. Under Indian law, the Indian Contract Act 1872 governs contractual obligations, with Section 10 setting essential requirements for valid agreements. The Companies Act 2013 regulates corporate entities through the Registrar of Companies (ROC) and Ministry of Corporate Affairs (MCA). The Industrial Disputes Act 1947 and state labour commissioners govern employment disputes. The Information Technology Act 2000 and IT (Reasonable Security Practices) Rules 2011 protect personal data. The Income Tax Act 1961 and Goods and Services Tax Act 2017 govern tax obligations through the Central Board of Direct Taxes (CBDT) and GST Council. Parties executing a Corporate Social Responsibility Policy (India) in India should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Indian Contract Act, 1872 sets the foundational requirements.
When Do You Need a Corporate Social Responsibility Policy (India)?
A CSR Policy is legally mandatory for every company that in any financial year has net worth of ₹500 crore or more, turnover of ₹1,000 crore or more, or net profit of ₹5 crore or more — under Section 135(1) of the Companies Act 2013. Failure to have a CSR Policy when required, or to constitute a CSR Committee, is itself a violation of the Companies Act 2013 and may attract penalties under Section 450 of the Act.
Companies crossing the Section 135 threshold for the first time in a financial year must constitute their CSR Committee and formulate a CSR Policy in that financial year, and must begin spending on CSR activities from the following financial year.
Companies that are subsidiaries of foreign multinational companies may need a CSR Policy that is consistent with their parent's global ESG framework while complying with the mandatory Schedule VII categories under the Indian CSR Rules.
Companies seeking listing on the BSE or NSE need a CSR Policy as part of their pre-IPO governance readiness — SEBI LODR Regulations 2015 and corporate governance standard practices require CSR Policies for listed companies.
Public sector undertakings (PSUs) have specific CSR guidelines from the Ministry of Corporate Affairs and their administrative ministries — PSUs typically have well-developed CSR programmes that must be documented in a formal CSR Policy consistent with the DPE (Department of Public Enterprises) Guidelines on CSR and Sustainable Development.
Companies with significant corporate reputation or ESG investor interest need CSR Policies that reflect best-practice impact measurement and SDG alignment, enabling transparent reporting of social and environmental outcomes in sustainability reports and SEBI BRSR disclosures.
Parties in India should prepare a Corporate Social Responsibility Policy (India) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Indian law, the Indian Contract Act 1872 governs contractual obligations, with Section 10 setting essential requirements for valid agreements. The Companies Act 2013 regulates corporate entities through the Registrar of Companies (ROC) and Ministry of Corporate Affairs (MCA). The Industrial Disputes Act 1947 and state labour commissioners govern employment disputes. The Information Technology Act 2000 and IT (Reasonable Security Practices) Rules 2011 protect personal data. The Income Tax Act 1961 and Goods and Services Tax Act 2017 govern tax obligations through the Central Board of Direct Taxes (CBDT) and GST Council. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Corporate Social Responsibility Policy (India)
A thorough CSR Policy for an Indian company must contain the following elements as required by the Companies (CSR Policy) Rules 2014 (as amended 2021) and corporate governance best practice.
CSR Committee: Composition of the CSR Committee (minimum three directors including one independent director for companies required to have independent directors), and the Committee's terms of reference.
CSR Vision and Objectives: The company's CSR vision, the SDGs it seeks to support, and the social, environmental, and developmental outcomes it aims to achieve.
Focus Areas and Eligible Activities: The CSR activities the company will undertake, mapped to Schedule VII of the Companies Act 2013. The activities should be appropriate to the company's sector, geographic footprint, and stakeholder priorities.
Mandatory Spend Calculation: The methodology for calculating the annual CSR spend obligation (2% of average net profits of the preceding 3 financial years, per Section 198 of the Companies Act 2013), and the procedure for determining and approving the annual CSR budget.
Implementation Model: Whether CSR will be implemented directly (by the company) or through registered implementing agencies. If through implementing agencies — the due diligence and selection procedure, CSR registration requirements (National CSR Data Portal registration mandatory since 2021), and the monitoring and fund disbursement process.
Ongoing Projects: Procedure for tracking multi-year ongoing projects, maintaining the Unspent CSR Account for unspent funds from ongoing projects, and reporting project completion.
Unspent Amounts: Procedure for transferring unspent CSR amounts to the Unspent CSR Account (within 30 days) or to Schedule VII funds (within 6 months), as mandated by the 2021 amendments.
Impact Assessment: For companies with CSR obligations ≥ ₹10 crore or projects with outlays ≥ ₹1 crore, the procedure for engaging independent impact assessment agencies.
Annual Reporting: Procedure for preparing the CSR Report (Annexure 2 to the Companies (CSR Policy) Rules 2014) and including it in the Board's Report and on the company's website.
Additional compliance elements for a Corporate Social Responsibility Policy (India) used in India include: Under Indian law, the Indian Contract Act 1872 governs contractual obligations, with Section 10 setting essential requirements for valid agreements. The Companies Act 2013 regulates corporate entities through the Registrar of Companies (ROC) and Ministry of Corporate Affairs (MCA). The Industrial Disputes Act 1947 and state labour commissioners govern employment disputes. The Information Technology Act 2000 and IT (Reasonable Security Practices) Rules 2011 protect personal data. The Income Tax Act 1961 and Goods and Services Tax Act 2017 govern tax obligations through the Central Board of Direct Taxes (CBDT) and GST Council. Forms-legal.com provides this template as a starting point for India-compliant documentation.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Corporate Social Responsibility Policy (India) (India) [Legal document template]. Forms Legal. https://forms-legal.com/india/business/policies/csr-policy-india
"Corporate Social Responsibility Policy (India) (India)." Forms Legal, 2026, https://forms-legal.com/india/business/policies/csr-policy-india.
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note = {Free legal document template. Based on Indian Contract Act, 1872}
}Frequently Asked Questions
Section 135 of the Companies Act 2013 makes CSR mandatory for companies that meet certain financial thresholds. Under Section 135(1), every company (whether private limited, public limited, or listed) that in any financial year has: (a) net worth of ₹500 crore or more; or (b) turnover of ₹1,000 crore or more; or (c) net profit of ₹5 crore or more must constitute a CSR Committee of its Board of Directors and formulate a CSR Policy. These thresholds are assessed based on the company's financials for the immediately preceding financial year. For the mandatory CSR spend requirement, the same thresholds apply — companies meeting any of the above criteria must spend at least 2% of their average net profits (calculated under Section 198 of the Companies Act 2013) of the three immediately preceding financial years on CSR activities specified in Schedule VII of the Companies Act 2013.
Schedule VII of the Companies Act 2013 lists the categories of activities that qualify as Corporate Social Responsibility (CSR) expenditure. The Schedule VII list has been progressively expanded through amendments — as of 2024, the following activities qualify. (i) Eradicating hunger, poverty and malnutrition; promoting preventive healthcare and sanitation; and making available safe drinking water. (ii) Promoting education, including special education and employment enhancing vocational skills among children, women, elderly, and the differently abled, and livelihood enhancement projects. (iii) Promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres; and other measures for senior citizens. (iv) Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining the quality of soil, air, and water (including contribution to the Clean Ganga Fund). (v) Protection of national heritage, art, and culture, including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts. (vi) Measures for the benefit of armed forces veterans, war widows and their dependants; and training to promote rural sports, nationally recognised sports, Paralympic sports, and Olympic sports.
The Companies (Amendment) Act 2019 introduced direct penalties for failure to comply with the mandatory CSR spending requirements under Section 135 of the Companies Act 2013. Before the 2019 amendment, the only consequence was a disclosure requirement (explaining non-compliance in the Board's Report) — the 2019 amendment introduced financial penalties. Financial Penalties Under Section 135(7): If a company fails to spend the mandatory CSR amount (2% of average net profits) in a financial year, the company is required to transfer the unspent amount to: (a) a Unspent CSR Account — for ongoing projects, within 30 days of the end of the financial year (to be spent on the project within 3 years); or (b) any specified fund listed in Schedule VII (PM National Relief Fund, PM CARES Fund, Swachh Bharat Kosh, etc.) — for amounts not related to any ongoing project, within 6 months of the end of the financial year. A company that fails to comply with the above transfer obligations shall be liable to a penalty of twice the amount required to be transferred to the Unspent CSR Account or the relevant Schedule VII fund, whichever is applicable, or ₹1 crore — whichever is less. Every officer of the company in default (director, CFO) shall be liable to a penalty of one-tenth of the amount required to be transferred to the Unspent CSR Account or the relevant fund, whichever is applicable, or ₹2 lakh — whichever is less.
The Companies Act 2013, Section 135(1) requires every company that meets the financial thresholds for mandatory CSR (net worth ≥ ₹500 crore, turnover ≥ ₹1,000 crore, or net profit ≥ ₹5 crore) to constitute a CSR Committee of its Board of Directors. The CSR Committee is a mandatory board-level committee — unlike several other committees that are only required for listed companies. Composition of the CSR Committee:
For a company that has independent directors, the CSR Committee must have at least three directors, one of whom must be an independent director (Section 135(1)). The requirement for an independent director in the CSR Committee was relaxed by an amendment — where a company is not required to have independent directors under Section 149(4) (e.g., unlisted private companies), the CSR Committee may comprise two or more directors. For unlisted public companies and private companies meeting the CSR thresholds but not required to have independent directors (e.g., private companies), the CSR Committee may consist of two or more directors. Functions of the CSR Committee: Under Section 135(3), the CSR Committee is responsible for: (a) formulating and recommending the CSR Policy to the Board; (b) recommending the amount of expenditure to be incurred on the CSR activities; and (c) monitoring the CSR Policy from time to time.
A Corporate Social Responsibility Policy (India) does not legally require a lawyer in India, and individuals and businesses may draft and execute the document independently. The Indian Contract Act, 1872 does not mandate legal representation for the creation or signing of this type of document. However, seeking independent legal advice from a qualified India lawyer is recommended for transactions involving substantial financial value, complex regulatory requirements, or cross-border elements where multiple legal jurisdictions may apply. A lawyer can verify that the document complies with all applicable statutory requirements, identify potential risks specific to the transaction, and confirm that the terms adequately protect the interests of all parties involved. The Supreme Court of India has jurisdiction over disputes arising from this type of document, and Registrar of Companies (ROC) may impose additional compliance obligations depending on the nature of the underlying transaction. Professional legal review is particularly advisable where the document will be submitted to government agencies or used as evidence in legal proceedings.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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