CSR compliance (section 135)

What it is

Section 135 of the Companies Act 2013 applies to a company that, in the preceding financial year, had a net worth of ₹500 crore or more, a turnover of ₹1,000 crore or more, or a net profit of ₹5 crore or more. It must spend at least 2% of its average net profit of the three preceding financial years on Schedule VII activities.

The CSR compliance page brings this together. It works out the obligation from the figures you enter, adds up the CSR spending recorded in your budget, checks the limits on overheads and impact assessment, and shows what must move to the Unspent CSR Account or a Schedule VII fund, with the deadlines. At year end it prints the Annual Report on CSR and exports the Form CSR-2 and BRSR Principle 8 data.

The figures are calculated from your records under section 135 and the CSR Rules as amended to 2026. CorpHands is not legal advice: confirm every figure with your auditor before filing.

What you can use it for

• See whether section 135 applies, test by test (net worth, turnover, net profit).
• Work out the obligation, including any excess of earlier years set off with a board resolution.
• Track spending on ongoing and other projects, administrative overheads (maximum 5% of total) and impact assessment (maximum 2% of total or ₹50 lakh, whichever is higher).
• See unspent amounts with their deadlines: the Unspent CSR Account within 30 days of the year end, a Schedule VII fund within 6 months.
• Follow each year's Unspent CSR Account: what was moved in, spent from it, the balance and the date by which it must be spent.
• Print the Annual Report on CSR (Annexure II) and download Form CSR-2 project data and the BRSR Principle 8 table.

How to do it

Enter the financial figures

1. Open CSR complianceGo to CSR workspace → CSR compliance. The page shows the current financial year.
2. Edit the figuresOpen Edit financial figures and enter the net profit for each of the last three financial years (calculated under section 198, in rupees; enter losses as negative numbers), and last year's turnover and net worth.
3. Set-off and auditor's figureIf the board approved setting off an earlier excess, enter it under Excess of earlier years set off this year. If your auditor's obligation differs from the calculation, enter it under Obligation as per auditor. Click Save.

Record projects and spending

1. Add projectsEach CSR project is a programme in the Budget. Click CSR details next to it to set the Schedule VII item, the amount allocated, whether it is an ongoing project, who implements it (directly or through an implementing agency with a CSR-1 number), the state and district, local area, aspirational district and the people who benefited.
2. Record paymentsRecord each payment in the budget with its receipt. Set the Type of CSR spending: CSR project, administrative overhead or impact assessment. Only paid amounts count.
3. Check the spending tableBack on CSR compliance, CSR spending shows ongoing projects, other projects, overheads and impact assessment, with each limit.

Deal with unspent money

1. Read the Unspent money tableIt shows how much must move to the Unspent CSR Account (unspent money of ongoing projects) and to a Schedule VII fund (other unspent money), what has been moved and the deadline.
2. Record the transferUse Record a transfer with the amount, the fund name (for a Schedule VII fund) and the bank reference.
3. Spend from the account laterIn later years, record payments with Paid from → Unspent CSR Account of that year. The Unspent CSR Account table tracks the balance and the date by which it must be spent.

Prepare the year-end reports

1. Fill in the report detailsUnder CSR policy and committee and Report details, add the policy outline and links, CSR Committee members, impact assessment summary, capital assets and, if needed, the reasons for not spending 2%.
2. Clear the checksCheck before filing lists gaps, such as spending without a Schedule VII item, payments to NGOs without a CSR-1 number, an expired 12A/12AB, overheads above 5% or projects without a state.
3. Print and exportUnder Statutory reports, open Annual report on CSR to print or save as PDF, and download CSR-2 project data (CSV) and BRSR Principle 8 (CSV).

Tips and good practice

• Enter the three years' net profits at the start of the year, so the obligation is known before you plan projects.
• Employee volunteering hours are not CSR expenditure and never count towards the obligation. They are reported separately.
• If the obligation is ₹10 crore or more, projects of ₹1 crore or more need an independent impact assessment; the page reminds you.
• Your fiscal year is April to March by default. Change it in Settings → Reporting before you record spending, if your company uses a different year.
• Look at the Unspent money table in the last quarter, so you can spend or plan transfers before the deadlines.

Questions