On 27 May 2026, the Ministry of Corporate Affairs (MCA) notified Companies (Corporate Social Responsibility Policy) Amendment Rules, 2026, aimed at modernizing CSR implementation mechanisms and aligning them with evolving financial instruments and regulatory frameworks.
Key Points:
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These Rules revise the Companies (Corporate Social Responsibility Policy) Rules, 2014, which lay down the framework for implementation, monitoring, and reporting of CSR activities by companies.
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The amendment introduces two important definitions into Rule 2:
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“Not for Profit Organization” is now clearly defined with reference to clause (e) of regulation 292A of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, ensuring consistency between corporate and securities law frameworks.
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“Zero coupon zero principal instrument” is introduced as a new financial instrument issued by such organizations, recognized under SEBI regulations and listed on the Social Stock Exchange.
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A new Rule 4A allows companies to undertake CSR activities through zero coupon zero principal instruments, subject to a limit of 10% of total CSR expenditure in a financial year.
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Companies investing through such instruments are exempt from impact assessment requirements, while issuing organizations must complete projects within three financial years and transfer unspent funds to Schedule VII funds upon termination.
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Schedule VII has also been amended to include “subscription to zero coupon zero principal instruments on Social Stock Exchange” as a permissible CSR activity, thus giving statutory recognition to this mode of CSR spending.
Also Read: SEBI issued Master Circular on Social Stock Exchange
Read more: SEBI declares Zero coupon, zero principal bond as securities
[Companies (CSR Policy) Amendment Rules, 2026, dt 27-5-2026]
[Amendment to Companies Act, 2013, dt 27-5-2026]
