CSR norms tightened for non-profits

The government has tightened disclosure norms for non-profits executing corporate social responsibility (CSR) projects on behalf of companies, introducing a more detailed registration process to ensure only genuine, tax-compliant entities receive CSR funds.

- Gireesh Chandra Prasad

According to a new version of Form CSR-1 issued by the ministry of corporate affairs (MCA), trusts, societies, and not-for-profit companies must submit a more structured application with enhanced disclosures to be eligible to implement CSR activities. The updated form, effective July 14, reflects a push to align corporate giving with tax law and financial scrutiny.

The move aims to prevent shell or bogus entities from accessing CSR funds and ensure that recipient organizations meet the criteria laid out in the Income Tax Act.

It also expands the categories of eligible institutions.

Over the last few years, the Income Tax Department has raised the reporting requirements for charitable trusts to prevent the abuse of this legal form for tax evasion.