Corporate Social Responsibility (CSR) implies a concept, whereby companies and businesses contribute to a better society and a cleaner environment. A concept that involves companies incorporating social and other valuable concerns into their business operations for the benefit of their stakeholders and society in general.

As per Section 135(1) of the Companies Act, 2013, it is mandatory that every company having :

   1. The net worth of INR 5 billion or more, or

   2. Turnover of INR 10 billion or more, or

   3. Net Profit of INR 50 million or more

should spend at least 2% of the average net profit of the three immediately preceding financial years.

On 20th September 2022, the Ministry of Corporate Affairs (MCA) issued a notification making amendments in the Companies (Corporate Social Responsibility Policy) Rules, 2014 (“Rules”).

   1. Under the amended rules, Companies having any amount in their Unspent Corporate Social Responsibility Account must also constitute a CSR committee. Prior to this amendment, the Constitution of CSR committee was for those companies for which the amount to be spent for CSR Activities exceeds Rs 50 Lakhs.

   2. CSR activities can be implemented through agencies registered under a company established under section 8 of the Act, or a registered public trust or a registered society, exempted under sub-clauses (iv), (v), (vi) or (via) of clause (23C) of section 10 along with registered under section 12A and approved under 80 G of the Income Tax Act, 1961.

   3. Expenditure on Impact assessment has been increased from capped INR 5 million to 2% of its total CSR expenditure or INR 5 million (whichever is higher).

   4. The rules also revised the format of the CSR activities in the Annual Report. The excessive detailing of the activities has been omitted, requiring only rationalized information.