Thinking · Obligation

What the Corporate Laws (Amendment) Bill 2026 changes about Section 135, and what it does not.

Abhijith Magal · 27 August 2026 · 9 min read

This page is India-specific. It concerns Section 135 of India's Companies Act, 2013, the statutory basis of mandatory CSR spending, and one Bill that would amend it.

The Corporate Laws (Amendment) Bill 2026 has been summarised widely since March, and a summary read quickly is easy to mistake for the law. The Bill has not changed a single threshold yet. A CSR head who locks the next budget off the proposed numbers could take a company out of scope that is still in it, or run a thirty-day deadline as ninety. The cost of that mistake is a statutory penalty, and it lands on the company and its officers personally. So here is the Bill, read against the Act as it stands.

Is the Corporate Laws (Amendment) Bill 2026 law yet?

No. The Bill, numbered 85 of 2026, was introduced in the Lok Sabha on 23 March 2026 and referred to a Joint Parliamentary Committee on the same day, with the Rajya Sabha concurring on 24 March. The committee adopted its report on 31 July and presented it to both Houses on 3 August 2026. PRS Legislative Research's bill tracker, checked at the time of writing, records nothing after the report.

Four steps stand between the Bill and a changed obligation. Both Houses have to pass it, with or without the committee's amendments. The President has to assent. The government then has to bring each provision into force by notification, and clause 1(2) lets it appoint different dates for different provisions, which the committee accepted without change. For several of the CSR changes a fourth step follows, because the Bill leaves amounts and conditions to be prescribed in rules that do not yet exist.

A threshold that depends on a rule not yet written is not a threshold you can budget against.

What does Section 135 require today?

A company comes into scope if, in the immediately preceding financial year, its net worth was ₹500 crore or more, its turnover ₹1,000 crore or more, or its net profit ₹5 crore or more. Any one is enough. The Board must then ensure the company spends at least two per cent of its average net profits from the three immediately preceding financial years on its CSR policy.

Three mechanics sit around that core. Money unspent on an ongoing project moves to an Unspent CSR Account within thirty days of the year end and has three financial years to be spent. Other unspent money goes to a Schedule VII fund within six months. Where the obligation does not exceed ₹50 lakh, the Board may discharge the committee's functions itself. Default under sub-sections (5) or (6) carries a penalty of twice the amount due or ₹1 crore, whichever is less, and every officer in default faces one-tenth of the amount or ₹2 lakh, whichever is less.

What exactly does the Bill propose for Section 135?

Clause 43 of the Bill makes four changes and leaves everything else alone. The table reads the Bill's text against the Act, with the committee's position as PRS Legislative Research summarised it.

Read the last two rows twice. The class exemption is the change with the widest reach, because it would let a rule take a whole category of companies out of Section 135 without Parliament naming the category. The committee pushed back on exactly that. It also added a proposal the government did not make: a notified list of entities whose receipts would not count as CSR spending. The committee asked the government to examine CSR contributions in kind as well. Both would change how a programme chooses its partners, and neither is law.

Which companies would the new threshold move, and which would it not?

Only one group moves: companies whose net profit sits between ₹5 crore and ₹10 crore, and who cross neither the net worth nor the turnover trigger. A company inside the ₹500 crore or ₹1,000 crore lines stays in scope whatever happens to the profit test, because the three triggers are alternatives.

For companies in the moving band, the committee's recommendation matters as much as the Bill. As introduced, the ₹10 crore figure could be revised by rule. If the committee's view prevails, the number would be fixed in the Act and could only move through Parliament again. That is a steadier figure to plan against, and it is still a proposal.

What should a CSR lead do in the November to December budget lock?

Budget under current law, and design so the programme does not care which version passes. Three moves do that, and none needs a legal opinion to start.

Run the scope test on the immediately preceding year's audited numbers, under the Act as it reads today. If the company is in scope only because of the profit trigger and profit sits between ₹5 crore and ₹10 crore, write that down as a named risk with both outcomes costed, not as an assumption.

Treat thirty days as the Unspent CSR Account deadline until a commencement notification says otherwise. A ninety-day window is useful slack if it arrives. Planning around it now is how a transfer goes late. The unspent CSR funds calculator runs on current law for this reason.

Build multi-year work as ongoing projects with milestones that a reviewer can test. That structure survives any threshold change, because it is the same structure the Act already rewards: ongoing projects carry unspent money forward for three years, and projects that never commenced do not. It also happens to be how climate-health work should be built in any case, since the exposure it answers runs across seasons, not financial years. How to defend a climate-health line item under Section 135 sets out what makes such a line survive the Board report, the auditor and the impact assessment.

What happens to the programmes a company is already running?

Nothing, until a provision is notified. A company in scope today has its obligation for this year fixed by last year's numbers under current law. If the Bill passes and the profit threshold is later notified, a company that falls out of scope loses the obligation, not the programme. What it chooses to continue funding becomes a board decision rather than a statutory one.

That is worth thinking through before it arrives, because a voluntary programme is judged differently. It has to earn its budget each year on results, with no statute behind it. The programmes that will survive that shift are the ones that already count outcomes rather than activity, and that can say which of the four climate-access conditions, Available, Affordable, Reachable and Continuous, the money kept open. The underlying argument is set out in climate change is a healthcare story, and the statutory vocabulary sits in the glossary.

The Bill will pass in some form, and when it does this page will be updated with the notified text and dates. Until then the Act is the law, and a budget built to hold under both is the cheapest insurance a CSR team can buy this winter.

Questions worth asking after this

Has the CSR net profit threshold changed to ₹10 crore?

No. The Corporate Laws (Amendment) Bill 2026 proposes it, but the Bill has not been passed. Section 135(1) still applies to a company with net profit of ₹5 crore or more in the immediately preceding financial year, or net worth of ₹500 crore or more, or turnover of ₹1,000 crore or more.

What did the Joint Parliamentary Committee say about the CSR changes?

According to PRS Legislative Research's summary of the report presented on 3 August 2026, the committee recommended removing the government's power to revise the net profit threshold, observed that the power to exempt classes of companies lacks statutory guidance and amounts to excessive delegation, recommended a notified negative list of entities whose receipts would not count as CSR, and asked the government to examine CSR contributions in kind.

Is the Unspent CSR Account deadline now 90 days?

No. Under Section 135(6) as it stands, money unspent on an ongoing project must move to the Unspent CSR Account within thirty days of the end of the financial year. The Bill proposes ninety days, but that change needs passage, assent and a commencement notification before it applies.

Abhijith Magal

Founder, Syntropy Earth. Nine years across two global pharmaceutical multinationals in patient access and commercial roles, with health-equity work alongside the WHO-Foundation and UNICEF. He works on climate-access: where climate disruption breaks the link between patients and care. More about Abhijith →

This page describes the Act and the Bill as published at the time of writing. It is not legal advice. Scope and spending decisions should be confirmed with your company secretary or counsel against the notified text.

Last updated: 24 September 2026