The Government of India has announced a new rule where only tax-verified non-profit organisations can carry out Corporate Social Responsibility (CSR) work for companies. This move is seen as an important step in increasing transparency, accountability, and trust in the way CSR funds are used across the country.

Effective from 14 July 2025, any company that wishes to spend its CSR funds must do so only through non-profits that have proper tax registrations. The implementing partners must hold valid registrations under Section 12A or 80G, or other required sections of the Income Tax Act, 1961. The Ministry of Corporate Affairs (MCA) has revised the CSR registration process to further strengthen this requirement and keep a closer check on all CSR-related activities.

The new CSR-1 online filing procedure makes it mandatory for organisations such as trusts, societies, and Section 8 companies to register and provide detailed tax and other compliance information via the MCA21 portal. Without this registration and valid tax documents, non-profits will not be able to receive any CSR funds or work on CSR projects. This ensures that only genuine, tax-compliant entities are eligible for handling CSR work, keeping away fake and dubious organisations.

Improved Transparency

Previously, there were concerns that some non-profit organisations operating for social work were not following proper tax norms, leading to questions about the use of funds. Now, all such entities must show proof of tax compliance and submit documents every five years to remain eligible. Through the digitised CSR-1 filing and tightened eligibility conditions, the government aims to build a system where corporates have the confidence that their CSR spending is genuinely being used for social good and that accountability is maintained at every step.

According to the Companies Act and new amendments, only those NGO entities with proper tax registration, a unique CSR Registration Number from the MCA, and valid compliance documents can partner with companies for implementing CSR activities. If a non-profit fails to meet these norms, it cannot receive CSR funds from any corporate. Besides, companies themselves are expected to maintain records and get certifications regarding the disbursal and use of their CSR budgets, further increasing scrutiny.

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