CSR calculator: does Section 135 apply, and how much must you spend?
A company must spend on CSR in FY 2026-27 if, in FY 2025-26, its net worth was ₹500 crore or more, its turnover ₹1,000 crore or more, or its net profit ₹5 crore or more. The amount is 2% of its average net profit for the last three years, worked out under Section 198. Enter your figures to get the working.
Enter last year's figures to see whether CSR applies.
| Net profit for CSR, FY 2023-24 | — |
|---|---|
| Net profit for CSR, FY 2024-25 | — |
| Net profit for CSR, FY 2025-26 | — |
| Average of the years | — |
| 2% obligation, Section 135(5) | ₹0 crore |
| Less: set-off of past excess | — |
| To spend in FY 2026-27 | ₹0 crore |
A planning aid, not legal advice. Figures are standalone and in ₹ crore. Check your Section 198 profit with your auditors.
How the calculator works it out
- Applicability. It tests the immediately preceding year’s net worth, turnover and net profit against the Section 135(1) limits. One test is enough. For the profit test it uses the same Section 198 figure as the average, after the Rule 2(1)(h) exclusions, which is the common reading.
- Net profit for CSR. For each year it takes net profit before tax under Section 198 and removes overseas branch profit and dividends from Indian companies that comply with Section 135 themselves, as Rule 2(1)(h) requires.
- The average. It averages the years you fill in, counting losses as negative. A company younger than three years uses the years since incorporation.
- The 2% figure. It takes 2% of a positive average. If the average is a loss, the obligation is nil, even when a threshold is met.
- Set-off. It deducts any excess spend from the previous three years, up to the year’s obligation, under Rule 7(3).
- Shortfall. If you enter what you have spent, it splits any shortfall between ongoing projects and everything else, then gives the transfer deadline for each and the maximum Section 135(7) penalty.
What it doesn’t do: decide whether an activity qualifies under Schedule VII, work out your Section 198 profit for you, or handle a holding and its subsidiaries together. Each company in a group tests and spends on its own figures.
Frequently asked questions
Which companies must spend on CSR under Section 135?
Any company 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 immediately preceding financial year. Meeting one test is enough. The tests apply to the standalone company, including private companies and Indian branches of foreign companies.
How is the 2% CSR amount calculated?
Take net profit before tax under Section 198 for each of the three preceding years. Remove overseas branch profit and dividends from Indian companies that themselves comply with Section 135. Average the three figures, counting losses as negative, and take 2% of that average. If the average is a loss, the amount is nil.
What if the company is less than three years old?
Section 135(5) then uses the average of the financial years completed since incorporation. In the calculator, leave the years before incorporation blank and it averages only the years you fill in.
Can excess CSR spending be carried forward?
Yes. Under Rule 7(3), spending above the 2% requirement can be set off against the next three years' requirement, if the board passes a resolution. Surplus arising from CSR activities, such as interest earned on CSR funds, cannot be counted as excess.
What happens to unspent CSR money?
Money earmarked for an ongoing project goes to a special Unspent CSR Account within 30 days of the year end and must be spent within the next three financial years. Any other shortfall goes to a Schedule VII fund, such as the PM CARES Fund, within six months of the year end.
Is a CSR committee always required?
No. If the CSR obligation is ₹50 lakh or less, the board can do the committee's work under Section 135(9). Since September 2022, though, a company with any balance in its Unspent CSR Account must have a CSR committee whatever its obligation.
Has the ₹5 crore net profit threshold changed?
Not yet. The Corporate Laws (Amendment) Bill, 2026 would raise it to ₹10 crore, lift the committee limit to ₹1 crore and give 90 days to fund the Unspent CSR Account. The Bill went to a Joint Parliamentary Committee, which reported on 3 August 2026, but it had not been passed as of 17 October 2026. Switch the calculator to the 2026 Bill view to see the effect.
Sources
- The Corporate Laws (Amendment) Bill, 2026: status and summary — PRS Legislative Research
- Companies (CSR Policy) Amendment Rules, 2021: detailed analysis — TaxGuru
- FAQs on CSR 2021 amendments — Vinod Kothari Consultants
- Highlights of the CSR Amendment Rules, 2022 — Vinod Kothari Consultants
- Companies (Corporate Social Responsibility Policy) Rules, 2014 — ca2013.com