CSR-2 FY 2025-26 May 31 deadline: unspent amount disclosure and the Section 135(5) Schedule VII compliance map

Form CSR-2 is the annual return that captures every Section 135-covered company's CSR spend, project portfolio, unspent amount, and compliance status. For FY 2025-26, the form is due May 31, 2026, and the May 2026 filings reflect the second year under the revised CSR Rules effective April 1, 2024 which tightened the ongoing-project framework and added new disclosure fields.

The Section 135 applicability check is the first gate. The CSR obligation arises in any financial year if the company met any one of three thresholds in the immediately preceding financial year: net worth ₹500 crore or more, turnover ₹1,000 crore or more, or net profit ₹5 crore or more. The thresholds are tested per financial year, so a company that meets the threshold in FY 2024-25 has a CSR obligation for FY 2025-26 (computed as 2 percent of average net profits of the preceding three FYs). Companies that ceased to meet the thresholds in FY 2025-26 but met them in FY 2024-25 must still file CSR-2.

The unspent amount treatment under Section 135(5) is the principal compliance dimension. The CSR obligation amount minus the amount actually spent during the FY equals the unspent amount. Under Section 135(5), the unspent amount must be transferred to a Schedule VII fund (PM CARES Fund, PM National Relief Fund, or similar specified fund) within 6 months of FY-end. The exception is amounts allocated to ongoing projects, which can be retained for the project's planned timeline up to 3 years.

The ongoing project framework under Rule 2(1)(j) requires the project to have implementation timeline of more than 1 year (and not exceeding 3 years), with CSR Committee approval that specifies milestones, budget, and timeline. The May 2026 CSR-2 form requires for each ongoing project: project description, expected completion date, milestone-wise budget broken down by FY, the implementation agency, and the geographic location. The implementing agency must be a Section 8 company, registered public trust, registered society, or government-established entity with at least 3 years of relevant track record.

The Schedule VII activity matching is the substantive compliance dimension. Every CSR spend must fall within one of the 12 categories listed in Schedule VII. The CSR-2 form requires the activity classification for each project, and the MCA portal validation rejects activities that do not map to a Schedule VII category. Common rejection categories are political party contributions, normal course of business expenditure, employee benefit programmes for the company's own employees, and expenditure that creates direct business value for the company.

The new disclosure field added in the May 2026 form is the impact assessment requirement under Rule 8(3) for companies with CSR obligation exceeding ₹10 crore. The impact assessment must be conducted by an independent agency for any project with budget exceeding ₹1 crore, and the assessment report must be attached to the CSR-2 filing.

KAMRIT's secretarial and CSR compliance desk handles CSR-2 preparation including Section 135 applicability assessment, ongoing project documentation, Schedule VII activity classification, and impact assessment coordination.