CSR Compliance Checklist: What Every CSR Head Must Do Before 31st March 2025

As the financial year draws to a close, CSR Heads across India must gear up to ensure full compliance with statutory obligations under the Companies Act, 2013. Here’s a comprehensive checklist to guide you through the essential actions and filings required before the FY 2024-25 ends:

Key CSR Compliance Tasks Before 31st March 2025

Ensure 100% Utilization of CSR Funds: All allocated CSR budgets must be spent before the financial year closes.

Handle Unspent CSR Amounts Appropriately:

Ongoing Projects: Transfer unspent funds to the Unspent CSR Account within 30 days from FY-end and ensure utilization within 3 years.

Other Projects: Transfer unspent amounts to government-specified funds (e.g., PM CARES, Clean Ganga Fund) within 6 months from FY-end.

Estimate Next Year’s CSR Budget: Forecast CSR obligations for FY 2025-26 based on the average net profits of the past three years.

Obtain Board Approval: Ensure all CSR expenditures, project changes, and fund allocations are reviewed and approved by the Board of Directors.

File CSR-2 Form with MCA: Submit Form CSR-2 along with AOC-4 well before the due date to avoid penalties.

Board Report Disclosures: Include detailed CSR disclosures in the annual Board Report, covering:

Project-wise CSR spends

Impact assessments

Reasons for any shortfall

Details of unspent amounts

Update Company Website: Publish:

CSR Policy

Ongoing and completed project details

Annual CSR fund utilization reports

Impact assessments and case studies

Comply with the 5% Administrative Cap: Ensure that administrative overheads do not exceed 5% of total CSR expenditure.

Maintain Proper Documentation: Retain all relevant CSR-related documents:

CSR project agreements

Partner NGO documentation

Board meeting minutes and approvals

Check for Tax Benefits: Assess if any CSR expenditures qualify for deductions under the Income Tax Act.

Verify MCA Registration of Partners: All implementing agencies must be registered with the Ministry of Corporate Affairs and possess a valid CSR-1 registration.

Include CSR in Annual Audit Scope: Confirm that CSR compliance and fund utilization are covered in the company’s annual statutory audit.

Rectify Any Past Non-Compliance: Identify and address any previous lapses to avoid regulatory action or penalties.

Conduct a CSR Review Meeting: Hold a year-end review with internal stakeholders to assess performance, capture learnings, and plan for FY 2025-26.

Engage Internal & External Stakeholders: Share CSR impact reports with the Board, employees, investors, and relevant authorities to showcase transparency and social impact.

Plan for Employee Engagement: Encourage active employee participation in CSR initiatives and build strategies for increased involvement in the coming year.

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Final Note:
Timely CSR compliance is not just about avoiding penalties—it’s about upholding your company’s social responsibility, enhancing public trust, and maximizing your impact on communities. Ensure your CSR strategy is aligned, compliant, and ready to scale for FY 2025-26.