Corporate Social Responsibility (CSR) in India is regulated under the Companies Act,

2013. As per the Companies Act, certain qualifying companies are required to
undertake CSR activities and comply with the provisions outlined by the Ministry of
Corporate Affairs. Here are the key compliances for a company regarding CSR in
India:

1. Applicability: Companies covered under Section 135 of the Companies Act,

2013 are required to comply with CSR regulations. This includes:
 Companies with a net worth of Rs. 500 crore or more.
 Companies with a turnover of Rs. 1,000 crore or more.
 Companies with a net profit of Rs. 5 crore or more during the
immediately preceding financial year.
2. Constitution of CSR Committee: A qualifying company must constitute a
CSR Committee comprising of:
 Three or more directors, with at least one being an independent
director.
3. Formulation of CSR Policy: The CSR Committee is responsible for
formulating and recommending a CSR policy to the board. The policy should
include:
 Areas of CSR activities.
 Modalities of execution.
 Monitoring mechanisms for implementation of CSR activities.
4. Allocation of Funds: Qualifying companies must allocate at least 2% of their
average net profits made during the three immediately preceding financial
years towards CSR activities.
5. Activities Covered: The CSR activities may include projects or programs
related to:
 Eradicating hunger, poverty, and malnutrition.
 Promoting education.
 Ensuring environmental sustainability.
 Gender equality and empowering women.
 Healthcare.
 Social business projects.
 Promoting rural development projects.
6. Reporting Requirements: The company must disclose CSR activities in its
annual report. The report should include:
 A brief outline of the CSR policy.
 Composition of the CSR Committee.
 Average net profit of the company.
 Details of CSR activities undertaken during the financial year.
 Amount spent on each activity.
 Reasons for any underspending.
7. Monitoring and Evaluation: The CSR Committee should monitor the
implementation of CSR projects and evaluate their impact.
8. Exemptions and Penalties: Companies failing to comply with CSR provisions
may face penalties including fines. However, small companies, foreign
companies, and companies whose CSR obligation does not exceed Rs. 50 lakh
are exempt from constituting a CSR Committee.