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Corporate Social Responsibility in India: Everything You Need to Know in 2026
India stands at a defining moment in its corporate responsibility journey. With billions of rupees channelled into social development every year, Corporate Social Responsibility (CSR) in India has transformed from a voluntary act of goodwill into one of the most powerful statutory tools for nation-building. Whether you are a corporate leader, a compliance officer, or a citizen curious about how businesses give back,this guide covers everything you need to know about CSR in India in 2026.
And if you are looking for a trusted NGO partner to fulfil your CSR obligations in Ahmedabad and Gujarat, meet Shaksham Foundation, a registered non-profit working tirelessly for orphans, vulnerable women, senior citizens, and underprivileged communities.
What is CSR? The Big Picture
Corporate Social Responsibility (CSR) is the practice by which businesses integrate social, environmental, and ethical responsibilities into their operations and stakeholder interactions. In simple terms, it is the idea that a company does not exist in isolation, it exists within a society, and has a duty to contribute positively to that society.
In India, CSR is not just a philosophy, it is the law. India was one of the first countries in the world to make CSR spending mandatory by statute, a bold and progressive step that has fundamentally changed how corporations engage with the communities around them.
Over the years, CSR in India has evolved from traditional charitable donations to structured, outcome-driven programmes covering education, healthcare, environmental sustainability, women’s empowerment, and more — aligning corporate goals with the country’s broader development agenda.
CSR Law in India, Section 135 of the Companies Act, 2013
The legal backbone of CSR in India is Section 135 of the Companies Act, 2013, which came into effect on 1 April 2014. This section introduced the concept of mandatory CSR spending for qualifying companies, making India a global pioneer in enacting corporate social responsibility legislation.
The key components of Section 135 include:
- Constitution of a CSR Committee: Qualifying companies must form a Board-level CSR Committee comprising at least three directors, including one independent director.
- Formulation of a CSR Policy: The committee must draft a CSR policy outlining the activities the company plans to undertake and the budgets allocated.
- Mandatory Spending: Companies must spend at least 2% of their average net profits of the preceding three financial years on CSR activities.
- Annual Reporting : CSR expenditure and activities must be disclosed in the company’s annual report.
- Unspent Funds: Any unspent CSR funds linked to ongoing projects must be deposited in a separate Unspent CSR Account and used within 3 years. Funds not linked to ongoing projects must be transferred to a Schedule VII fund within six months of the financial year end.
The rules governing implementation are detailed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, which have been amended multiple times to strengthen accountability and broaden impact.
Who Must Comply? Eligibility Thresholds in 2026
Under the current law, a company is required to constitute a CSR Committee and comply with CSR obligations if it meets any one of the following financial thresholds during the preceding financial year:
| Criteria | Current Threshold |
|---|---|
| Net Worth | ₹500 crore or more |
| Turnover | ₹1,000 crore or more |
| Net Profit | ₹5 crore or more |
Foreign companies with branch offices or project operations in India are subject to the same eligibility rules and obligations.
Note: The Corporate Laws (Amendment) Bill, 2026 (discussed below) proposes changes to the net profit threshold. Keep reading for the latest update.
How Much Must Companies Spend?
Qualifying companies must spend a minimum of 2% of their average net profits (before tax) over the preceding three financial years on approved CSR activities. A few important rules apply:
- Administrative Overhead Cap: A maximum of 5% of total CSR expenditure can be used for general management and administration of CSR functions.
- Carry-Forward of Excess Spend: If a company spends more than 2% in a given year, up to 5% of the excess can be carried forward and set off against CSR obligations for the next 3 financial years.
- No Carry-Forward of Shortfall: Under-spending does not carry over, the shortfall must be explained in the annual report and transferred to the prescribed fund.
- Impact Assessment: Companies spending ₹10 crore or more on CSR in the preceding three financial years must undertake an independent impact assessment for projects of ₹1 crore or more.
Schedule VII, Approved CSR Activities
All CSR spending must align with Schedule VII of the Companies Act, 2013, which defines the approved categories of social and environmental activities. These include:
- 🎓 Education: Promoting education, especially among children, women, the elderly, and differently-abled individuals
- 🏥 Healthcare: Eradicating hunger, poverty, and malnutrition; promoting preventive healthcare and sanitation
- ♀️ Women Empowerment: Promoting gender equality, setting up homes and hostels for women and orphans
- 🌿 Environmental Sustainability:Conservation of natural resources, maintaining ecological balance, and animal welfare
- 🏡 Rural Development: Projects that develop rural areas
- 💼 Livelihood Enhancement: Vocational skills training and livelihood enhancement projects
- 👴 Senior Citizens: Measures to reduce inequalities faced by socially and economically backward groups, including the elderly
- 🏛️ Heritage & Culture: Protection of national heritage, art, and culture
- 🎖️ Armed Forces Veterans: Welfare of war widows and their dependants
- ⚽ Sports: Training to promote rural or nationally recognized sports
- 🧪 Technology Incubators: Contributions to technology incubators in academic institutions
- 🌾 Slum Development: Programs for the development of slum areas
- 🌍 Disaster Management: Relief, rehabilitation, and reconstruction activities
Activities outside this list, including those that benefit only the company’s employees or management, do not qualify as CSR expenditure.
Key CSR Developments and Amendments in 2026
The Corporate Laws (Amendment) Bill, 2026
On 23rd March 2026, the Government introduced the Corporate Laws (Amendment) Bill, 2026 in the Lok Sabha, proposing significant changes to the Companies Act, 2013. The Bill was immediately referred to a Joint Parliamentary Committee for examination. Here is what it proposes for CSR:
Proposed Change 1: Raised Net Profit Threshold
The Bill proposes to raise the net profit threshold from ₹5 crore to ₹10 crore. This means companies with a net profit between ₹5 crore and ₹10 crore, but with net worth and turnover below the other thresholds, would no longer fall under mandatory CSR obligations if the Bill becomes law. The net worth (₹500 crore) and turnover (₹1,000 crore) thresholds remain unchanged.
Proposed Change 2: Permanent Exemptions for Certain Companies
The Bill also proposes creating a category of companies that would be permanently exempt from CSR obligations, with the power to define and populate that category vested in the Executive. Legal experts have raised concerns about this proposal, noting that it could create wide exemptions without adequate parliamentary oversight.
Proposed Change 3: Zero Coupon Zero Principal Instruments
The 2026 amendment rules introduce provisions allowing CSR to be implemented through zero coupon zero principal instruments, a new financial mechanism for CSR deployment, with specific rules for unspent fund transfers and SEBI compliance reporting.
Shift Towards Strategic CSR
Beyond legislative changes, 2026 is seeing a clear industry shift. With rising ESG (Environmental, Social, and Governance) scrutiny from investors and regulators, companies are moving away from last-minute compliance spending towards long-term, outcome-driven CSR partnerships. Impact measurement, third-party assessments, and transparent reporting are now table stakes for serious CSR programmes.
How Companies Can Partner With NGOs for CSR Implementation
Many companies choose to implement their CSR programs through registered non-governmental organizations (NGOs) and implementing agencies. This is an effective model because NGOs bring grassroots expertise, established community trust, and program delivery capacity that most corporate teams cannot replicate in-house.
Who Qualifies as a CSR Implementing Agency?
To receive and utilize CSR funds as an implementing agency, an NGO must:
- Be a registered charitable trust, society, or Section 8 company under Indian laws.
- Have a track record of at least three years of conducting similar charitable activities.
- Be registered on the MCA CSR Portal (Form CSR-1)
- Hold valid 12A and 80G registrations from the Income Tax Department.
- Be registered with NGO DARPAN, the government’s online partnership portal.
- Have transparent governance, up-to-date audited accounts, and strong program documentation
Best Practices for Successful CSR Partnerships
- Align the NGO’s work with at least two or three Schedule VII categories for broader relevance.
- Establish a clear Theory of Change with measurable outcomes from the outset.
- Agree on reporting formats, milestones, and fund utilization timelines before disbursement.
- Conduct or commission independent impact assessments for larger projects
Document beneficiary data, photographs, and activity reports throughout the project
Penalties for Non-Compliance with CSR in India
Non-compliance with CSR obligations carries serious legal and financial consequences under the Companies Act:
| Violation | Penalty |
|---|---|
| Company fails to spend 2% CSR amount | Penalty up to twice the amount required to be transferred, or ₹1 crore, whichever is less |
| Officer in default (e.g., CFO, CS) | Penalty up to one-tenth of the amount required to be transferred, or ₹2 lakh, whichever is less |
| Failure to transfer unspent funds to prescribed account/fund | Additional financial penalty as above |
Beyond financial penalties, non-compliance can damage a company’s reputation, impact its ESG ratings, and attract regulatory scrutiny during audits and annual filings.
Meet Shaksham Foundation , A Trusted CSR Partner in Ahmedabad
Join Hands to Make the World a Better Place
Shaksham Foundation was born from the dream of a group of young, passionate individuals with a singular vision: to change society by supporting orphans, vulnerable women, senior citizens, and those struggling for basic survival.
Registered under the Bombay Public Charitable Trust (F/21847/Ahmedabad) and under the Society Act (Reg. No. GUJ/22263/Ahmedabad), Shaksham Foundation is recognized as a leading NGO in Ahmedabad, conducting multiple sustainable development programs aligned with India’s national development goals.
Our Vision
Shaksham Foundation stands to serve humans with a humane approach. Through education, food, shelter, and healthcare, our core focus is to make this world a better place, one life at a time.
Our Mission
We have pledged to build an orphanage in Ahmedabad, a safe haven for children in dire need of shelter and food. With proper medical support, quality education, and Leftover Food Donation programs, we are ready to walk the extra mile to uplift the most vulnerable people in our community.
What Shaksham Foundation Does
Shaksham Foundation’s work spans multiple areas, all of which align directly with Schedule VII of the Companies Act, 2013, making it a legally eligible and impactful CSR implementation partner:
-
- 🎓 Education for Underprivileged Children & Youth: We aim to educate the underprivileged children and youth of Ahmedabad, creating a strong foundation for their future. With proper education support and soft skill training, we push these children to enter the mainstream of life and stand tall as dignified individuals.
- 🏡 Orphan Care & Shelter: At the heart of our mission is the welfare of orphaned children. We work to provide them with safe shelter, nutritious food, and a loving environment where they can grow and thrive.
- 👩 Support for Vulnerable Women: We stand by women who are marginalized and vulnerable, offering them support, resources, and pathways towards empowerment and independence.
- 👴 Old Age Home Support in Ahmedabad: As founders of Shaksham Foundation, we nurture underprivileged elders at the old age home in Ahmedabad, ensuring dignity and care for our senior citizens who need it most.
- 🍱 Leftover Food Donation Program: We run an active food donation program, ensuring that no morsel of surplus food goes to waste while people in our community go hungry.
- 🌿 Environmental Conservation: We work to preserve nature’s ecosystem by confronting core challenges through education and sustainable development programs. We believe a healthy and educated community is the strongest foundation for our society’s future.
- 🏥 Healthcare & Medical Support: We provide medical support to those who cannot afford it, ensuring basic healthcare reaches every corner of the community we serve.
Why Partner With Shaksham Foundation for Your CSR Programme?
If your company is looking for a credible, registered, and impact-driven NGO partner for CSR in Ahmedabad or Gujarat, Shaksham Foundation checks every box:
| What Corporates Need | What Shaksham Foundation Offers |
|---|---|
| Legally registered implementing agency | Registered under Bombay Public Charitable Trust & Society Act, Gujarat |
| Schedule VII aligned activities | Education, healthcare, women empowerment, senior care, environment, food |
| Transparent governance & reporting | Full documentation, beneficiary records, and activity reports provided |
| Local presence in Ahmedabad & Gujarat | Deep community roots and grassroots networks across Ahmedabad |
| Long-term sustainable development focus | Multi-programme approach targeting education, shelter, food & healthcare |
By partnering with Shaksham Foundation, your company is not just fulfilling a legal obligation — you are making a tangible, lasting difference in the lives of orphaned children, struggling women, neglected elders, and impoverished families right here in Ahmedabad.
Ready to Make Your CSR Count?
Connect with Shaksham Foundation today and channel your company’s CSR investment into real, measurable social impact in Ahmedabad and Gujarat.
Reach out to us to discuss your CSR programme and partnership opportunities.
Frequently Asked Questions About CSR in India 2026
Q1. Is CSR mandatory for all companies in India?
No. CSR is mandatory only for companies that meet at least one of the three financial thresholds: net worth of ₹500 crore or more, turnover of ₹1,000 crore or more, or net profit of ₹5 crore or more in the preceding financial year.
Q2. What happens if a company does not spend its full 2% CSR amount?
Unspent amounts linked to ongoing projects must be deposited in an Unspent CSR Account and utilised within three years. Amounts not linked to ongoing projects must be transferred to a government-approved Schedule VII fund within six months of the financial year end. Failure to comply attracts financial penalties for both the company and its officers.
Q3. Can a company give CSR funds directly to an NGO?
Yes, companies can implement CSR through registered NGOs (implementing agencies) that meet eligibility criteria including registration under Indian laws, a three-year track record, CSR-1 registration on the MCA portal, and 12A and 80G certifications.
Q4. Are donations to NGOs automatically eligible as CSR?
Not automatically. The project or programme must fall under the approved categories in Schedule VII of the Companies Act, and the implementing NGO must be a registered and eligible entity. Simple one-time donations without programme alignment generally do not qualify.
Q5. What is the Corporate Laws (Amendment) Bill, 2026 proposing for CSR?
The Bill proposes raising the net profit threshold for CSR applicability from ₹5 crore to ₹10 crore, and creating a permanently exempt category of companies. As of June 2026, the Bill is under review by a Joint Parliamentary Committee and has not yet become law.
Q6. Can Shaksham Foundation help my company with CSR in Ahmedabad?
Yes. Shaksham Foundation is a registered NGO in Ahmedabad with programmes aligned to Schedule VII categories including education, healthcare, women empowerment, senior citizen care, environmental sustainability, and food donation. We welcome corporate CSR partnerships and can help companies fulfil their obligations meaningfully and transparently.
Q7. What is Schedule VII of the Companies Act?
Schedule VII is the list of approved areas in which companies can spend their mandatory CSR funds. It covers education, healthcare, sanitation, gender equality, environmental sustainability, rural development, livelihood enhancement, senior citizen care, cultural heritage protection, disaster relief, and more.
12. Conclusion: CSR in India in 2026, Compliance is Just the Beginning
CSR in India in 2026 is at an exciting and consequential juncture. With proposed amendments to the Companies Act being debated, rising ESG expectations from investors, and a growing recognition that compliance-only CSR leaves enormous value on the table, companies have every reason to elevate their approach.
The most impactful CSR programmes are not built on spreadsheets and checklists, they are built on genuine partnerships with organisations that live and breathe social change every day. Shaksham Foundation is that kind of partner. From educating orphaned children and empowering vulnerable women, to caring for elderly citizens and protecting our environment, Shaksham Foundation is turning the promise of a better India into everyday reality in Ahmedabad.
Join hands with us. Let’s make the world a better place, together.Get in Touch
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