Overview of Corporate Social Responsibility and Companies (Amendment) Bill, 2025
Corporate Social Responsibility (CSR) in India mandates eligible companies to spend 2% of their average net profits on social activities, a framework introduced under the Companies Act, 2013. The Companies (Amendment) Bill, 2025 seeks to expand this by lowering eligibility thresholds and enhancing governance, introduced in Rajya Sabha on December 5, 2025, but not yet passed. This blog explores both.
Corporate Social Responsibility (CSR) Fundamentals
India pioneered mandatory CSR through Section 135 of the Companies Act, 2013, effective from April 1, 2014, requiring companies meeting specific financial criteria to form a CSR Committee and spend 2% of average net profits over the prior three years. Eligible companies currently include those with net worth of INR 500 crore or more, turnover of INR 1,000 crore or more, or net profit of INR 5 crore or more in the preceding year. Activities cover areas like education, health, rural development, and environment, implemented directly, via agencies, or contributions to funds etc.
Current Thresholds
| Criteria | Current Threshold (INR) |
| Net Worth | 500 crore or more |
| Turnover | 1,000 crore or more |
| Net Profit | 5 crore or more |
Unspent amounts must transfer to specified funds if not spent within timelines, with penalties for non-compliance.
Key changes proposed under Companies (Amendment) Bill 2025
Introduced on December 5, 2025, the Companies (Amendment) Bill, 2025, amends Section 135 of the Companies Act to expand the scope of mandatory Corporate Social Responsibility (CSR). This change coincides with the ongoing 2025 CSR rule updates, including revised CSR-1 forms designed to enhance transparency in reporting. It lowers the threshold of net worth from INR 500 crore to INR 100 crore, turnover from INR 1000 crore to INR 500 crore, net profit from INR 5 crore to INR 3 crore, capturing mid-sized firms. CSR Committees must now include at least one independent director and one with CSR project expertise, shifting from compliance to impact-focused leadership.
Proposed Thresholds
| Criteria | Current (INR) | Proposed (INR) |
| Net Worth | 500 crore | 100 crore |
| Turnover | 1,000 crore | 500 crore |
| Net Profit | 5 crore | 3 crore |
Implications
Lower thresholds could include thousands more companies, boosting social investments but straining smaller firms’ resources.
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