Difference Between CSR-1 and CSR-2 Form

Howard Bowen, an American economist, introduced the concept of corporate social responsibility (CSR) to the world in 1953, pointing out that businesses have a moral obligation to society. It evolved in the 1950s to focus on philanthropy and charity purposes. Now, it is no longer a voluntary act or a matter of goodwill in India. Instead, it is a statutory obligation for specific companies that fall under the ambit of Section 135 of the Companies Act, 2013. To ensure transparency and proper observation of the CSR activities, the Ministry of Corporate Affairs (MCA) has mandated two compliance forms named “CSR-1” and “CSR-2”. CSR-1 is the initial step that the companies have to take before carrying out and receiving the CSR activities, whereas CSR-2 is about reporting the CSR activities undertaken by a company in a financial year.

This blog will help you to understand the meaning of each form, its applicability, contents, filing process, and differences so that companies can stay fully compliant.

What is CSR-1?

CSR-1 is an electronic form that mandates that the entities that are mandated to carry or wish to take the Corporate Social Responsibility (CSR) activities and receive funding from the entities file this form as registration. It became mandatory from 01.04.2021. Without this registration, NGOs, trusts, societies, and other eligible entities cannot legally receive CSR funds from the companies.

Legal framework governing CSR-1

• Section 135 of the Companies Act, 2013
• Rule 4(1) and Rule 4(2) of the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021.

Who needs to file the CSR-1 form?

The following entities are mandated to register before undertaking CSR activities:

1. A registered society, public trust.
2. A Section 8 company, registered society, or registered trust established by the Central or State Government.
3. Entities created under an Act of Parliament or a State Legislature.
4. A Section 8 company, registered society, or registered public trust registered under Section 12A & 80G of the Income Tax Act with at least three years’ track record of undertaking similar activities.

 Contents of CSR-1

• Nature and type of entity
• CIN or registration number
• Date of incorporation, address, and email ID of the entity
• PAN of the entity
• Details of directors, trustees, or authorised representatives
• DIN & DSC of the signing director
• Professional certification by CA/CS/CMA in practice

Documents required

• PAN card of the entity
• Registration certificate
• Registration certificate under sections 12A and 80G of the Income Tax Act, 1961
• NGO Darpan ID (if applicable)
• DSC & PAN of authorised signatory
• CSR policy and CSR report (if applicable)

Filing Process

1. Download Form CSR-1 from the MCA portal.
2. Fill in the required details, attach documents, and affix them with the DSC.
3. Get the form verified by a practising CA, CS, or CMA.
4. Upload the form to the MCA portal with a valid DSC.
5. Receive a unique CSR Registration Number.

What is CSR-2?

CSR-2 is an annual return that companies falling under Section 135 of the Companies Act, 2013, have to file with the Registrar of Companies (RoC) to report their CSR activities done in a financial year.

Who needs to file the CSR-2 form?

Any company that meets any of the following eligibility criteria in the preceding financial year has to file the CSR-2 Form:

• Net worth of ₹500 crore or more, or
• Turnover of ₹1,000 crore or more, or
• Net profit of ₹ five crore or more.

This also applies to eligible foreign companies operating with their office in India.

 Information required in the CSR-2 form

1. Basic company details such as CIN, name, registered address, email ID, financial year, and SRN of AOC-4 filing.
2. CSR applicability & financial data, including its net worth, turnover, net profit, and criteria triggering CSR.
3. CSR committee details, including their names, DINs, category, meetings held and attended.
4. Impact assessment & set-off, whether it was done, and amounts available from previous years.
5. Last three years’ profits, adjustments, 2% CSR obligation.
6. CSR spending details, such as projects undertaken, ongoing/non-ongoing, location, implementing agencies, and administrative costs.
7. Unspent CSR from previous years, including their details and transfers.
8. Capital assets created from CSR funds.
9. Reasons for non-spending, explanation if 2% obligation is not met.

Filing Process

1. File AOC-4 or its variants first at the MCA portal.
2. Gather audited financials, CSR policy, and project reports.
3. Log in to the MCA portal.
4. Fill out the CSR-2 form online, and attach the details.
5. Sign with DSC of the authorised signatory.
6. Submit and note SRN.

Penalties for Non-Compliance

The Companies Act, 2013, as well as the Ministry of Corporate Affairs, has not specified any penalty for not filing the CSR-2 form. As per section 450 of the Companies Act, 2013, the company shall be liable to pay the penalty of ₹10,000, which can extend up to ₹2,00,000 and ₹1,000 per day for continuing default. The officer, including the director, shall be liable to pay the penalty of ₹50,000.00

CSR-1 Vs CSR-2

	CSR-1	CSR-2
Purpose	To register NGOs/eligible entities to undertake CSR activities	To report on annual CSR activities undertaken by the company
Who is required to file?	NGOs, trusts, societies, Section 8 companies, entities under law	Companies fulfilling any of the eligibility criteria mentioned in Section 135 of the Companies Act, 2013. Net worth of ₹500 crore or more, or Turnover of ₹1,000 crore or more, or Net profit of ₹ five crore or more.
Frequency	One-time (unless changes occur)	Annual
When to file	Before receiving CSR funding	After the financial year ends, along with/after AOC-4
Legal provision governing it	Rule 4(1) & 4(2) of CSR Policy Rules, 2021	Section 135 & Companies (Accounts) Rules, 2014 (Amended 2022)
Main contents	Registration details, directors/trustees, legal approvals	CSR policy, projects, expenditure, unspent funds
Outcome	CSR registration number issued	CSR compliance report recorded by MCA
Penalty	Cannot receive CSR funds without registration	As per Section 135 of the Companies Act, 2013, if the company fails to transfer the required amount in the CSR activity, then the company shall be penalised with twice the unspent amount or ₹1 crore, whichever is less.

Conclusion

CSR-1 and CSR-2 may sound similar, but they perform two distinct functions in India’s CSR compliance framework.

• CSR-1 ensures that only registered and verified entities implement CSR activities.
• CSR-2 ensures that companies show how they have spent money on their CSR projects.