In a landmark move to strengthen corporate accountability and streamline social impact initiatives, the Ministry of Corporate Affairs (MCA) has notified the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2025, which came into effect on July 14, 2025.
These changes mark a significant shift in India’s CSR landscape, introducing stricter compliance norms, enhanced transparency, and a renewed focus on credible implementation.
What’s New in the CSR Policy?
At the heart of the amendment is the revised e-Form CSR-1, which entities must file to register as eligible CSR implementing agencies under Section 135 of the Companies Act, 2013. The updated form introduces several key changes:
- Expanded Eligibility Criteria: Entities eligible to undertake CSR activities now include:
- Section 8 companies
- Registered public trusts and societies
- Entities set up by central or state governments
- Organizations established under Acts of Parliament or State Legislatures
- Institutions approved under Section 80G, Section 12A, or exempted under Section 10(23C) of the Income Tax Act
- Mandatory Experience Requirement: Entities not established by companies must now demonstrate a minimum three-year track record in CSR or similar social impact activities.
- Professional Certification: The CSR-1 form must be certified by a practicing Chartered Accountant (CA), Company Secretary (CS), or Cost Accountant (CMA), ensuring the authenticity of submitted documents.
- Digital Verification: PAN, OTP- verified email addresses, and Digital Signature Certificates (DSCs) are now compulsory for authorized signatories such as directors, trustees, or CEOs.
Why These Changes Matter
The revised rules aim to curb misuse of CSR funds and ensure that only credible, tax-compliant entities are entrusted with executing CSR projects. Over the years, concerns have emerged about shell organizations and fraudulent NGOs exploiting CSR mandates for financial irregularities.
By aligning CSR registration with tax verification and professional oversight, the government seeks to build a more transparent and accountable CSR ecosystem.
False declarations or suppression of material facts in the CSR-1 form will now attract penalties under Sections 448 and 449 of the Companies Act, which deal with false statements and evidence.
Implications for Corporates
For companies, the new rules mean greater due diligence in selecting CSR partners. Corporates must ensure that their implementing agencies are registered under the revised CSR-1 framework and maintain updated records. This shift is expected to enhance stakeholder confidence and ensure that CSR investments are directed toward genuine, impactful causes. Additionally, companies may need to revisit existing partnerships and verify whether their current CSR collaborators meet the new eligibility and compliance standards.
Challenges for NGOs and Social Enterprises
While the policy changes promote transparency, they also pose challenges for smaller or newly established NGOs. The requirement for tax registrations, professional certification, and a proven track record may create barriers for grassroots organizations still navigating the regulatory landscape.
However, experts believe this will ultimately strengthen the sector, encouraging non-profits to adopt robust governance practices and align more closely with national development goals.
A Step Toward Mission Viksit Bharat
The 2025 CSR policy changes align with India’s broader vision of Mission Viksit Bharat by 2047, which emphasizes inclusive growth, sustainability, and social equity. By tightening norms and encouraging responsible corporate behavior, the government is paving the way for more effective publicprivate collaboration in addressing pressing social challenges.
Conclusion
The Companies (CSR Policy) Amendment Rules, 2025, represent a pivotal moment in India’s CSR journey. With stricter norms, enhanced verification, and a renewed emphasis on credibility, the policy sets the stage for a more transparent, impactful, and accountable CSR framework. As companies and NGOs adapt to the new regime, the hope is that CSR in India will evolve into a powerful tool for nationbuilding and sustainable development.
