CSR Obligation Calculator
CSR applies to a company that, in the previous financial year, had net worth of ₹500 crore or more, turnover of ₹1,000 crore or more, or net profit of ₹5 crore or more. It must spend at least 2% of its average net profit of the three immediately preceding financial years on Schedule VII activities.
How it works
- Thresholds: net worth ₹500 crore, turnover ₹1,000 crore or net profit ₹5 crore, in the preceding financial year.
- Obligation: at least 2% of average net profit of the three immediately preceding financial years, calculated under Section 198.
- A CSR committee is not required where the amount to be spent is ₹50 lakh or less; the board performs its functions.
- Companies with an average CSR obligation of ₹10 crore or more must commission impact assessments for projects of ₹1 crore or more.
- Unspent amounts go to an Unspent CSR Account for ongoing projects, or to a Schedule VII fund.
Sources: Companies Act, 2013: Section 135 and Schedule VII (India Code); Ministry of Corporate Affairs: Companies (CSR Policy) Rules, 2014, as amended in 2021
Frequently asked questions
Who has to spend on CSR in India?
Companies with 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.
Is tree plantation an eligible CSR activity?
Yes. Schedule VII item (iv) covers environmental sustainability, ecological balance, agroforestry and conservation of natural resources.
What if average net profit is negative?
Then the 2% obligation is zero for that year, although a company may still choose to spend.
Can CSR be spent over several years?
Yes. Ongoing projects can run up to three years after the year they start, with unspent money moved to an Unspent CSR Account.
Is this calculator legal advice?
No. Net profit for CSR is calculated under Section 198; confirm your figures with your CFO or auditor.
