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CSR Funds for COVID

Renu Suresh

Expert

Published on: Jul 14, 2025

CSR funds for COVID–19

Considering the spread of novel Coronavirus (COVID-19) in India, the Ministry of Corporate Affairs (MCA) has announced that spending of corporate social responsibility funds (CSR funds) for COVID-19 is an eligible CSR activity of a company. The Government clarified that the funds spent on measures to tackle the Covid-19 outbreak would be considered as the corporate social responsibility (CSR) activity of firms.

Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR) defines as an organization's sense of responsibility towards the environment (both ecological and social) and community which it operates. Companies can fulfil this responsibility by contributing to CSR funds. Considering the spread of novel Coronavirus in India and  World Health Organisation (WHO) declaration of COVID-19 as a pandemic, the central Government of India has decided to treat Coronavirus (COVID-19)  as a notified disaster.

Contribution to COVID–19

The funds can be spent on various activities related to COVID-19 on the promotion of healthcare; including preventive healthcare and sanitation will be considered as the company's CSR obligations. The official notification of MCA related to the CSR contribution for COVID -19 is as follows:

Applicability of CSR Provision

According to the Companies Act 2013, certain classes of profitable organizations have to shell out at least 2 per cent of the three-year annual net profit towards Corporate Social Responsibility (CSR) activities in a particular financial year. The companies having following net-worth during the immediately preceding financial year can make CSR expenditure for COVID - 19 under Section 135 of the Companies Act, 2013, every company having
  • The net worth of Rs. 500 Crore or more
  • Turnover of Rs. 1000 crore or more
  • Net Profit of Rs. 5 crores or more
A foreign corporation having its branch office or project office in India, which fulfils the criteria mentioned above can also make the Corporate Social Responsibility (CSR) for COVID – 19.

Portal for CSR Contribution

For the purpose CSR contribution, the Government of India may immediately establish a portal on which specific requirements such as equipment, medicines, etc. will be posted, and the company may be permitted to contribute CSR funds in cash or kind towards those particular requirements. In the new fiscal year, a significant portion of the CSR funds can transfer to the CSR fund without upsetting commitments to ongoing projects

Modification of Schedule VII of Companies Act, 2013 for COVID - 19

Because of the spread of novel Corona Virus in India, Ministry of Corporate Affairs amends Schedule VII under Section 135 of Companies Act, 2013. According to the Schedule VII of Companies Act, Corporate Social Responsibility Policies activities are as follows:
  • Eradicating extreme hunger and poverty
  • Promotion of education
  • Promoting gender equality and empowering women
  • Producing child mortality and improving maternal health
  • Combating human immunodeficiency virus (HIV), acquired immune deficiency syndrome, malaria and any other diseases
  • Employment enhancing vocational skills
  • Ensuring environmental sustainability
  • Social business project
  • Contribution to the National Relief fund of Prime Minister or any other relief fund set up by the Government of India
  • Government for socio-economic development and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women
Along with these activities, the Government has included disaster management, including relief, rehabilitation and reconstruction activities as Corporate Social Responsibility (CSR) Activities. The official notification of the Ministry of Corporate Affairs regarding the changes in the Corporate Social Responsibility (CSR) Activities is as follows:

Eligible CSR Expenditure Related to COVID-19 Activities

The Ministry of Corporate Affairs has announced the eligible CSR expenditure related to COVID-19 activities; the details are as follows:

Contribution to PM CARE Fund

If an organization has contributed to the PM CARE Fund to combat COVID-19, such contribution will be considered as the CSR activity of that organization. The item no (viii) of Schedule VII of the Companies Act, 2013, says that any contribution to the prime minister's national relief fund or any other fund of the Central Government will be considered as available CSR activity. Accordingly, the contribution made to the PM CARE Fund will be qualifying as CSR expenditure of an organization.

Contribution to the State Disaster Management Authority

The contribution made to State Disaster Management Authority to battle COVID-19 shall qualify as CSR expenditure under the Companies Act, 2013. This activity is covered under the item no (xii) of Schedule VII (disaster management, including relief, rehabilitation, and reconstruction activities) as available CSR activity.

Spending of CSR funds for COVID-19

The spending on CSR funds for COVID-19 related activities such as the promotion of health care, including preventive health care, sanitation and disaster management shall qualify as CSR expenditure.

Ineligible Activities

The following contributions related to COVID-19 activities are not eligible for CSR expenditure.  Contribution to 'Chief Minister's/ State Relief Funds Chief Minister's Relief Fund or State Relief Fund for COVID-19 is not incorporated in Schedule VII of the Companies Act, 2013, hence any contribution to such funds will not qualify as reasonable CSR expenditure

Payment of Wages to Employees

Payment of wages to employees and workers, including contract labour, in normal circumstances, is contractual and statutory the obligation of the company. Thus, the amount of salary to employees and workers during the lockdown period shall not qualify as proper CSR expenditure.

Payment of wages to daily wage workers during the lockdown period

Amount of salary to temporary or daily wage workers during the lockdown period is part of the moral or contractual obligations of the firm and applies to all companies. Hence, payment of salary to temporary workers during the lockdown period shall not count towards CSR expenditure.
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