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CS Professional · CSR and Social Governance · Guidelines on CSR

Under the original 2014 CSR framework, a company that failed to spend the prescribed amount had to explain the reasons in its Board's report. Following the 2021 amendment to the CSR Rules, a company has an unspent amount for FY 2025-26 relating to an ongoing project. What must it do?

The company must transfer the unspent amount for the ongoing project to a special Unspent CSR Account within thirty days from the end of the financial year. The 2021 amendment replaced the earlier comply-or-explain approach, where giving reasons in the Board's report was enough.

  1. AMerely disclose the reasons in the Board's report, as under the 2014 framework
  2. BTransfer the unspent amount to a special Unspent CSR Account within thirty days from the end of the financial yearCorrect
  3. CCarry it forward without any transfer and spend it whenever convenient
  4. DPay it as a penalty to the Registrar of Companies

Explanation

The 2021 amendment moved CSR from pure comply-or-explain to a stricter regime. Unspent amounts for an ongoing project must go to an Unspent CSR Account within thirty days of the financial year end, to be spent within three years. Merely giving reasons reflects the earlier 2014 approach. There is no penalty payable to the Registrar as the default step.

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