Government Raises CSR Threshold To Rs 10 Crore, Giving Companies Greater Spending Flexibility

Corporate Social Responsibility Gets Flexible With New Rules

The government has introduced the Corporate Laws (Amendment) Bill, 2026 in Parliament, proposing significant changes to CSR norms under the Companies Act. The reforms are designed to promote ease of doing business, reduce compliance pressure, and encourage impactful CSR projects.

New Threshold For CSR Spending

Under the revised framework, only companies with a net profit of Rs 10 crore or more will be required to spend 2 percent of their average net profits on CSR activities. Previously, the threshold was Rs 5 crore, meaning fewer companies will now fall under mandatory CSR obligations.

Extended Timeline For Unspent Funds

The period for transferring unspent CSR funds to a designated account has been increased from 30 days to 90 days. This extension allows companies to plan and execute larger, long-term projects without rushing compliance.

CSR Committee Flexibility

The amendment also proposes changes to the eligibility threshold for constituting CSR committees, easing requirements for smaller firms. This ensures that compliance is proportionate to company size and profitability.

Broader Corporate Reforms

Alongside CSR changes, the Bill includes decriminalisation of procedural defaults, simplified merger and amalgamation processes, hybrid AGMs, and relaxations for small firms. These reforms align India’s corporate governance framework with global standards.

CSR Rule Highlights

• Net profit threshold raised to Rs 10 crore
• Unspent CSR funds transfer timeline extended to 90 days
• Relaxed eligibility for CSR committees
• Focus on reducing compliance burden for smaller firms
• Part of wider reforms including decriminalisation and hybrid AGMs

Sources: The Economic Times , Financial Express , Rediff Moneynews