The government has established a detailed disclosure framework for corporate social responsibility spending. This will improve transparency, it is also likely to increase compliance costs. The corporate affairs ministry has released Form CSR-2 (Report on Corporate Social Responsibility). The form requires organisations to report information on the amount of CSR money spent on ongoing projects as well as non-ongoing projects. Other criteria include disclosing the amount spent on impact assessments and whether any capital assets were generated or acquired as a result of CSR in a given fiscal year. All companies that are obligated to carry out CSR activities under the relevant rules or are voluntarily carrying out CSR operations must file the web-form Addendum to AoC-4 CSR as an independent form for FY 20-21.
According to the Companies Act of 2013, certain large businesses must contribute at least 2% of their three-year annual average net profit to CSR initiatives in a particular fiscal year. Companies with a net worth of at least Rs 500 crore, a minimum turnover of Rs 1,000 crore, or a net profit of Rs 5 crore or more in the previous financial year are required to participate in CSR activities.