Government Tightens CSR Norms for Non-Profit Organisations

The government has introduced stricter disclosure norms for non-profits executing corporate social responsibility (CSR) projects on behalf of companies, aiming to ensure that only genuine and tax-compliant entities are eligible to receive CSR funds.

 

According to the Ministry of Corporate Affairs (MCA), the revised norms—effective July—require trusts, societies, and non-profit companies to submit a more detailed Form CSR-1 with enhanced disclosures to qualify as implementing agencies. The move seeks to curb the misuse of CSR provisions by shell or bogus entities and prevent potential tax evasion.

 

The updated Form CSR-1 broadens eligibility criteria to include only those registered under Section 12A of the Income Tax Act, which certifies an organisation as a genuine charitable institution. The revised form also mandates the furnishing of a copy of the registration certificate issued under Sections 80G and 12A, as applicable, by the Income Tax Department.

 

Industry experts say the change will help ensure that CSR funds are directed only to credible and transparent organisations. “This will require implementing agencies to obtain income tax registration prior to receiving CSR project allocations, strengthening governance and accountability in CSR spending,” said Amit Maheshwari of AKM Global, a tax and consulting firm.

 

The move is part of a broader strategy to streamline CSR implementation, improve transparency, and align it with tax compliance requirements. The government expects these steps to boost confidence among corporate donors and other stakeholders while creating a more accountable CSR ecosystem.