Rule 7 CSR Expenditure
- Chapter
- II · CSR Obligations
- Text as on
- 14 August 2026
7.CSR Expenditure. -
(1) The board shall ensure that the administrative overheadsDefined in rule 2: expenses incurred by the company for general management and administration of CSR functions, but excluding expenses directly incurred for the designing, implementation, monitoring and evaluation of a particular CSR project or programme. shall not exceed five percent of total CSR expenditure of the company for the financial year.
(2) Any surplus arising out of the CSR activities shall not form part of the business profit of a company and shall be ploughed back into the same project or shall be transferred to the Unspent CSR Account and spent in pursuance of CSR policyDefined in rule 2(f): CSR Policy means a statement containing the approach and direction given by the board of a company, taking into account the recommendations of its CSR Committee, and includes guiding principles for selection, implementation and monitoring of activities as well as formulation of the annual action plan and annual action plan of the company or transfer such surplus amount to a Fund specified in Schedule VII, within a period of six months of the expiry of the financial year.
(3) Where a company spends an amount in excess of requirement provided under sub-section (5) of section 135 , such excess amount may be set off against the requirement to spend under sub-section (5) of section 135 up to immediate succeeding three financial years subject to the conditions that -
(i) the excess amount available for set off shall not include the surplus arising out of the CSR activities, if any, in pursuance of sub-rule (2) of this rule.
(ii) the Board of the company shall pass a resolution to that effect.
(4) The CSR amount may be spent by a company for creation or acquisition of a capital asset, which shall be held by -
(a) a company established under section 8 of the ActDefined in rule 2(a): Act means the Companies Act, 2013 (18 of 2013), or a Registered Public Trust or Registered Society, having charitable objects and CSR Registration Number under sub-rule (2) of rule 4; or
(b) beneficiaries of the said CSR project, in the form of self-help groups, collectives, entities; or
(c) a public authorityDefined in rule 2(j): Public Authority means 'Public Authority' as defined in clause (h) of section 2 of the Right to Information Act, 2005 (22 of 2005):
Provided that any capital asset created by a company prior to the commencement of the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021, shall within a period of one hundred and eighty days from such commencement comply with the requirement of this rule, which may be extended by a further period of not more than ninety days with the approval of the Board based on reasonable justification.