In exercise of powers reserved under Section 135 and Section 469 (1) & (2) of the Companies Act, 2013, the Central Government hereby make Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 to amend Companies (Corporate Social Responsibility Policy) Rules, 2014 and the same was effective from 22nd January 2021.
Now let’s have a detail knowledge about the changes in rules.

  • Define CSR.

In Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 the definition of CSR is an exclusive definition and according to it the following activities will not be considered as CSR Activity

  • Activities undertaken in pursuance of normal course of business of company (except COVID 19 related Research & Development up to the financial year 2022‐23, subject to certain conditions);
  • Any activity undertaken by the company outside India (except for training of Indian sports personnel representing any Union territory or State at national level or India at international level);
  • Contribution of any amount directly or indirectly to political party under section 182 of the Act.
  • Activities that significantly benefit the employees of the company as defined in section 2(k) of the Code on Wages, 2019;
  • Activities supported by the companies on sponsorship basis for getting the marketing benefits for its products or services;
  • Activities carried out for the fulfillment of any other statutory obligations under any law in force in India;


  • Whether every company which fall in above limit have to constitute CSR Committee


Yes No CSR Committee to be constituted, if the CSR amount to be sent by a company does not exceed fifty lakh rupees.
And in this case Board will discharge all the function.


  • Whether the CSR spending is mandatory?


Before the amendment CSR spending was voluntary under section 135. But in non-compliance and found guilty of fraud then liable under section 447 CSR Spending is mandatory and on non- compliance company is liable to pay penalty twice the default or Rs. 1 Cr., whichever is less.
Every officer liable to pay penalty @ 10% of default or Rs. 2 Lacs, whichever is less.


  • Accounting for CSR Expenditure? 


The company has to make disclosure regarding the unspent amount in the board report and the same will be added to the amount, to be spend next year.
·       Unspent amount not related to ongoing Projects
Financial Year 2020-2021: For remaining unspent amount (other tan ongoing projects) shall be transferred to Schedule VII by 30/09/2021
General Provision: Along with the disclosure of the amount in Board Report, the company has to transfer the amount (doesn’t relate to any ongoing project & failure to spend) to fund specified in Schedule VII with in 6 Months of close of financial year.
·       Unspent amount relating to ongoing projects
General Provision: The company shall transfer the amount with in 30 days from the end of the financial year to a special account (Unspent corporate social Responsibility Account) to be opened by company in any scheduled bank.
Financial Year 2020-2021: Company shall transfer the amount in Unspent corporate social Responsibility Account by 30/04/2021.
·       Extended time for spending of unspent amount related to ongoing project (which is transferred to UCSRA)
General Provision: Such amount shall be spent within a period of 3 FY from the date amount is transferred, if failing to do the same then the company has to transfer the amount to fund specified in Schedule VII within 30 days from the end of 3rd Financial year.
Financial Year 2020-2021: Amount transferred to UCSRA has to be utilized for project upto FY 2023-2024, otherwise transfer to fund specified in Schedule VII.


No set off was allowed Excess amount may be set off by the company against the requirement to spend under section 135(5) upto immediate succeeding 3 FY
But such amount shall not include the surplus arising of the CSR Activities (if any)
Company board shall pass a board resolution to that effect.


  • Implementing Agency

Companies are allowed to expand the CSR amount either on its own or through Implementing agency
Implementing Agency can be one of the following:

  • Companies Registered under Section 8
  • Registered Public trust
  • Registered Society
  • Company with established track record of at least 3 years.


The registration of such agency was not mandatory, and no registration number was allotted to them. Now the registration of Implementing agency is necessary with the effect from 01/04/2021 and for registration the entities have to file Form CSR 1 from with a unique CRN Registration No shall be generated.
The implementing Agency has to register under section 12A & 80 G of the Income tax act

International Organisations: The company can engage international organisations (which are notified by Central government) for CSR. Its main function will be designing, monitoring and evaluation of the CSR projects or programmes as per the CSR policy and it also include capacity building of personnel for CSR.

  • Annual Action Plan 

The CSR Committee shall formulate and recommend to the board the Annual action plan in pursuance of CSR policy of the company.
Annual action plan formulated by the Committee shall include the following:

  • List of approved CSR Projects and programmes, these projects must be within the scope of Schedule VII of the Act.
  • Manner of execution of projects and programmes specified in plan.
  • the modes of utilization of funds and implementation schedules for the projects or programmes
  • Monitoring of the projects and programmes and reporting of the same.

The Board may alter the Annual action plan suggested by the CSR Committee.

  • Capital Assets

The Capital assets for CSR can be held by

  • Section 8 Company
  • Registered public trust
  • Registered society

which are having there CSR registered number.
The CSR Assets created prior to rules, required to comply with the provision of the rules within period of 180 days and the board may extend the same by 90 days.

  • Treatment of surplus arising out of CSR Activities 

Any amount/surplus arising out of CSR activities shall not form the part of business profit and the same shall be either

  • Reinvest into the same projects; or
  • Shall transfer such surplus amount to unspent CSR Account and spent in accordance with CSR policy/ annual action plan
  • Transfer to fund specified in Schedule VII of the act.
  • Impact Assessment


  • Company having the obligation of spending average CSR amount of Rs. 10 Crore or more in 3 immediately preceding FY in pursuance of Section 135(5)

By whom

  • Impact assesstment to be done by an independent agency.

Which Project

  • Impact assessment of csr projects having outlays of 1 crore or more and which have been completed in a period of not less than one year before undertaking the impact study


  • Impact assessment expenditure for a Financial year shall not exceed 5% of total CSR expenditure for that FY or Rs 50 Lakh,whichever less.