Companies (CSR Policy) Amendment Rules, 2026
Companies (CSR Policy) Amendment Rules, 2026
In exercise of the powers conferred under section 135 and section 469 of the Companies Act, 2013, the Central Government has notified the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2026.
1. Short Title and Effective Date
These rules shall be known as the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2026 and shall become effective from the date of their publication in the Official Gazette.
2. Introduction of New Definitions
The amendment introduces the following definitions in the Companies (Corporate Social Responsibility Policy) Rules, 2014:
- Not for Profit Organization (NPO): An organization having the meaning assigned under the relevant provisions of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.
- Zero Coupon Zero Principal (ZCZP) Instrument: A security issued by a Not for Profit Organization registered with the Social Stock Exchange segment of a recognized stock exchange in accordance with SEBI regulations.
3. CSR Implementation Through ZCZP Instruments
A new Rule 4A has been inserted to enable companies to undertake CSR activities through subscription to ZCZP instruments.
Key Provisions
a. CSR Expenditure Limit
A company may allocate CSR funds towards ZCZP instruments, subject to a ceiling of 10% of its total CSR expenditure for the relevant financial year.
b. Exemption from Impact Assessment
Companies subscribing to such instruments will not be required to conduct impact assessments for projects financed through these instruments.
c. Responsibilities of the Issuing NPO
The Not for Profit Organization issuing the ZCZP instrument shall:
- Utilize the funds for a project having a duration not exceeding three consecutive financial years from the date of issue.
- Transfer any unutilized amount, upon delisting or termination of the instrument, to a fund specified under Schedule VII of the Companies Act, 2013.
- Submit the prescribed compliance report to the Securities and Exchange Board of India.
d. Applicability of Existing CSR Rules
The general provisions governing CSR implementation under Rule 4 shall apply to CSR activities undertaken through ZCZP instruments, except for sub-rules (5) and (6).
4. Objective of the Amendment
The amendment establishes a structured framework for channeling a portion of CSR funds through Social Stock Exchange-listed instruments, thereby facilitating transparent funding of social impact projects undertaken by eligible Not for Profit Organizations.
