A corporate CSR committee checks three registrations before it commits money to an education project: Form CSR-1 registration with the Ministry of Corporate Affairs, and registration under Sections 12A and 80G of the Income-tax Act. Together these confirm that the implementing agency is a legally recognised not-for-profit, that its income is tax-exempt, and that the government has vetted it as a charitable institution. A school project without all three is not fundable under the Companies (CSR Policy) Rules, however good the cause.
What does the law require of an implementing agency?
Section 135 of the Companies Act, 2013 obliges companies above the prescribed net-worth, turnover or profit thresholds to spend two per cent of their average net profit of the preceding three financial years on activities listed in Schedule VII. A company can spend directly, or through an implementing agency. Rule 4(1) of the Companies (CSR Policy) Rules, 2014, as amended in 2021, defines who that agency can be: a Section 8 company, a registered public trust or a registered society, in each case registered under Sections 12A and 80G of the Income-tax Act, and either established by the company itself or holding an established track record of at least three years in similar activities. Government-established entities are the other permitted route.
The 2021 amendment also introduced the registration step. Since 1 April 2021 every implementing agency must file Form CSR-1 electronically with the Registrar of Companies and obtain a unique CSR Registration Number before it can receive CSR funds. The form is signed by the agency and certified by a practising chartered accountant, company secretary or cost accountant.
What does each registration actually prove?
| Registration | Issued by | What it establishes | Why the committee cares |
|---|---|---|---|
| Form CSR-1 | Ministry of Corporate Affairs | The entity is a permitted implementing agency and holds a CSR Registration Number | Without it the spend is not CSR expenditure at all |
| Section 12A (now 12AB) | Income-tax Department | The institution is registered as charitable and its income is exempt | Confirms not-for-profit character and that funds are not taxed on receipt |
| Section 80G | Income-tax Department | Donations to the institution qualify the donor for deduction | A second layer of departmental vetting; a hygiene signal even where CSR spend itself is not claimed as a deduction |
A CSR-1 number is the gate; 12A and 80G are the credentials behind it. In practice the committee will ask to see all three certificates, check that the names match exactly, and confirm none has lapsed. Since 2021, 12A and 80G registrations are time-bound and require periodic renewal, so an expired certificate is a common reason a project stalls at the diligence stage.
What else does a committee check beyond the registrations?
Registration is necessary but not sufficient. A well-run CSR committee typically works through a second list before it signs:
Fit with Schedule VII
The activity must map to a listed item, most often item (ii), promoting education, or item (vii), training to promote sports. The committee will want the project description written in Schedule VII language, not marketing language.
Ownership of assets
Rule 7(4) of the CSR Rules requires that any capital asset created with CSR money be held by a Section 8 company, registered trust or society with CSR-1 registration, by the beneficiaries themselves, or by a public authority. It cannot sit on the contributing company's balance sheet or with a for-profit entity. For a school building this is the single most important structural question, and it is why the property must be held by the not-for-profit vehicle rather than a developer.
Ongoing project treatment
A multi-year school build is an "ongoing project" under the rules, with a maximum duration of three years excluding the year of commencement. Unspent amounts on ongoing projects must be transferred to a dedicated Unspent CSR Account within thirty days of the financial year end. The committee needs a project schedule that fits these rules.
Administrative overheads
The rules cap a company's administrative CSR overheads at five per cent of total CSR expenditure. An agency whose budget shows heavy administration will be asked to restructure it.
Impact assessment
Companies with an average CSR obligation of ten crore rupees or more over the preceding three years must commission an independent impact assessment for projects of one crore rupees or more, completed at least a year earlier. Larger donors will therefore want baseline data and measurable outcomes written into the proposal from day one.
Committees increasingly ask for a board resolution from the implementing agency, its last three years of audited accounts, its FCRA status if any foreign funds are involved, and a utilisation-certificate format agreed in advance. None of these are statutory, but all of them shorten the approval cycle.
How does this apply to a K-12 school project?
A premium K-12 school is a three-layer asset: a long-lived campus, an operating institution, and a public-good component such as scholarship seats, teacher training or sports infrastructure. CSR money can only enter the third layer, and only through a compliant vehicle. That is why SriYantra structures the public-good layer inside a Section 8 company. That vehicle is currently being established; CSR participation in SriYantra-structured projects opens once its CSR-1 registration is granted. Until then, the checklist above is what any school promoter should be preparing, because it is exactly what the committee on the other side of the table will ask for.
Frequently asked questions
Is CSR-1 registration mandatory for every implementing agency?
Yes. Since 1 April 2021 an implementing agency must hold a CSR Registration Number issued after filing Form CSR-1 with the MCA before it can receive CSR funds. Spend routed to an unregistered entity does not count as CSR expenditure.
Can a company fund a school it has just set up?
Rule 4(1) allows an implementing agency established by the company itself, provided it is a Section 8 company, registered trust or society with 12A and 80G registration and CSR-1. The three-year track record requirement applies only to agencies not established by the company.
Why does a committee ask for 80G if CSR spend is not tax-deductible for the company?
80G is a statutory requirement for the implementing agency under Rule 4(1), and it signals that the Income-tax Department has vetted the institution as charitable. It is a diligence credential rather than a tax benefit for the donor.
Can CSR money pay for a school building?
It can, subject to Rule 7(4): the building must be held by a CSR-1 registered Section 8 company, trust or society, by the beneficiaries, or by a public authority. It cannot be owned by the contributing company or by any for-profit entity.
