The Companies Act of 2014 introduced compulsory corporate philanthropy in India through Section 135. It mandated businesses with ₹500 crore in net assets, ₹1,000 crore in annual revenue, or ₹5 crore in net profits to allocate 2% of their three-year average profits to CSR initiatives. These funds cannot be deducted as taxable expenses.
Read Also: Musk proposes $3.5 trillion Tesla-SpaceX merger
This has created a massive pool of money. Companies spend around ₹40,000 crore on CSR in FY25, a 40% increase from the previous year. A recent CSR Outlook report suggests annual spending could reach ₹77,000 crore by the end of this decade.
