India is one of the few countries where corporate social responsibility is a legal duty, not just good practice. Since 1 April 2014, Section 135 of the Companies Act, 2013 has required companies above a certain size to spend part of their profits on approved social causes.
The law answers three questions: which companies must spend, how much they must spend, and where the money can go. Everything else in this course hangs off those three questions.
From “comply or explain” to “comply or transfer”
In the early years, a company that did not spend its CSR amount only had to explain why in its board report. Amendments that took effect in January 2021 made the duty much firmer. Money that isn't spent now has to be moved into a dedicated account or a government fund within fixed deadlines, and missing them attracts penalties. Module 3 covers the details.