/ CSR Specialist · Updated 2026-10-22
Best CA for CSR Section 135 Companies Act India 2026, 2% CSR spend + Form CSR-2 compliance.
Section 135 Companies Act 2013: companies crossing specific thresholds must spend 2% of average net profit over 3 preceding FYs on Corporate Social Responsibility (CSR). Form CSR-2 reporting. Specific permissible activities + specific disallowed. BQP CSR specialist practice covers eligibility + CSR Committee + spending framework + Form CSR-2 + Schedule VII compliance. Here's the complete 2026 framework.
DC
Written by CA Durgesh Chavda
Chartered Accountant (ICAI) · Founder, Bharat Quantum Prospera · US incorporation, India-US DTAA, FEMA ODI, NRI taxation, cross-border structuring · LinkedIn
/ Section 135 threshold
Who's in CSR scope.
- Net worth of INR 500 crore+ OR
- Turnover of INR 1,000 crore+ OR
- Net profit of INR 5 crore+
- Threshold assessed on previous FY basis.
- Once in scope, CSR obligation continues until company falls below ALL thresholds for 3 consecutive FYs.
/ CSR obligation
The 2% rule.
- Average net profit over 3 preceding FYs × 2% = CSR spend target.
- If spending less than 2%: unspent balance in current FY must be transferred to specific Unspent CSR Account within 30 days of FY end; must be spent on CSR activities within 3 FYs.
- Alternative: transfer to specific Fund (PM National Relief Fund, etc.) within 6 months of FY end.
- If after 3 FYs unspent balance still remains: transfer to specific Fund + Section 135 Schedule VII compliance.
- CSR committee: minimum 3 directors; small company exemption.
/ Schedule VII permissible activities
What qualifies as CSR.
- Eradicating hunger, poverty, malnutrition.
- Promoting education.
- Promoting gender equality + empowering women.
- Reducing child mortality + improving maternal health.
- Combating HIV, malaria, specific diseases.
- Environmental sustainability.
- Protection of national heritage, art, culture.
- Rural + sports development.
- Specific disaster relief.
- Rural / slum / sanitation / drinking water.
- COVID-19 relief + public health initiatives.
- Specific funds (PM National Relief Fund, specific education funds).
/ Form CSR-2 + annual reporting
The disclosure.
- Form CSR-2 filed with ROC: specific company-level CSR disclosure.
- Reports: 2% target + actual spend + CSR activities + implementing agency / recipient details.
- Due 90 days from end of CSR financial year.
- Section 135(5): if company fails to spend, Board's report must explain reasons.
- Penalty: Section 135(7) + Section 450 default - 2x unspent amount or INR 1 crore (whichever less) + INR 50 lakh per officer in default.
- Specific CSR mentions in Board's Report + Director's Report.
/ Our scope for CSR
Complete offering.
- Section 135 threshold applicability analysis (annual).
- CSR committee setup + ongoing governance.
- CSR policy drafting.
- Annual Action Plan on CSR activities.
- CSR spending framework + implementing agency due diligence.
- Unspent CSR Account management + 3-year window compliance.
- Schedule VII permissible activity validation.
- Form CSR-2 preparation + filing.
- Board's Report + Director's Report CSR section.
- Audit coordination (statutory audit's CSR review).
Last updated: 2026-10-22.
/ Ready when you are
Company in Section 135 CSR scope?
2% spend + Schedule VII + CSR Committee + Form CSR-2 + Unspent Account management. BQP CSR specialist practice.
FAQ
Common questions, answered.
Which companies must comply with Section 135 CSR?
Net worth INR 500 crore+ OR Turnover INR 1,000 crore+ OR Net profit INR 5 crore+. Threshold assessed on previous FY basis. Once in scope, CSR obligation continues until company falls below ALL thresholds for 3 consecutive FYs.
What's the 2% CSR spending obligation?
Average net profit over 3 preceding FYs × 2% = CSR spend target. Must be spent on permissible Schedule VII activities. Unspent balance: transfer to Unspent CSR Account within 30 days of FY end; spend within 3 FYs. If still unspent: transfer to specific Fund. Penalty: 2x unspent amount or INR 1 crore (whichever less).
What activities qualify as CSR?
Schedule VII of Companies Act 2013: eradicating hunger/poverty, education, gender equality, child mortality, HIV/malaria, environmental sustainability, national heritage/art/culture, rural development, sports, disaster relief, rural sanitation/water, COVID-19 relief, specific government funds. Classification validated by CSR committee + statutory auditor.
What's Form CSR-2 and when is it due?
Form CSR-2 filed with ROC: specific company CSR disclosure (2% target + actual spend + activities + implementing agencies + recipients). Due 90 days from end of CSR financial year. Reflected in Board's Report + Director's Report.
What's the penalty for CSR non-compliance?
Section 135(7) + Section 450: 2x unspent CSR amount or INR 1 crore (whichever less) + INR 50 lakh per officer in default. Materially higher than most Companies Act penalties. ROC adjudication proceedings.
Does BQP handle CSR compliance for Section 135 companies?
Yes - end-to-end. Threshold analysis + CSR committee + policy + Annual Action Plan + spending framework + Unspent Account management + Form CSR-2 + Board's Report + audit coordination. For companies crossing Section 135 thresholds. WhatsApp +91 78018 87130.
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