CSR Policy Template: How to Draft and Approve One

By SCORE Editorial Team · Prepared by SCORE’s audit, tax and advisory practice · Law stated as on 7 September 2026

Quick answer: A CSR policy template sets out your company’s CSR approach: chosen Schedule VII focus areas, delivery routes, governance, monitoring and reporting. Since 2021 the policy is a high-level statement. Projects and budgets go into a separate Annual Action Plan each year. The CSR Committee formulates the policy, the Board approves it, and the company publishes it.

Who needs a CSR policy?

Every company covered by Section 135 of the Companies Act, 2013 needs one. Coverage is tested on the immediately preceding financial year. You are covered if you had any one of these:

Threshold	Limit
Net worth	₹500 crore or more
Turnover	₹1,000 crore or more
Net profit	₹5 crore or more

A company whose obligation is ₹50 lakh or less still needs a policy. Under Section 135(9), the Board does the CSR Committee’s work, including drafting the policy. Foreign companies with an Indian branch or project office are also covered if they cross a threshold.

Our applicability guide explains the tests and the 2% calculation in full.

What does the law say a CSR policy must contain?

The law is brief. Rule 2 of the CSR Rules defines the policy as a statement of the Board’s approach and direction. It must cover guiding principles for selecting, implementing and monitoring CSR activities. It must also cover how the Annual Action Plan is formulated.

Section 135(3) adds that the policy should indicate the activities to be undertaken within Schedule VII. Everything else in a good template is best practice, not a legal checklist.

What is the difference between a CSR policy and an Annual Action Plan?

The 2021 amendment split the old, detailed policy into two documents. The policy now sets direction. The Annual Action Plan carries the year’s numbers.

	CSR policy	Annual Action Plan
Horizon	Multi-year	One financial year
Content	Focus areas, approach, governance, monitoring	Projects, execution mode, fund use, schedules, monitoring, impact assessment
Recommended by	CSR Committee (or Board if no committee)	CSR Committee (or Board if no committee)
Approved by	Board	Board; it can be altered during the year
Where disclosed	Website and Board’s Report	Projects approved by the Board go on the website

Keep budgets out of the policy. If you do not, every budget change becomes a policy amendment.

CSR policy template: the 11 sections to include

Use this format as a starting point. Adapt the wording to your business and geography.

#	Section	What to write
1	Purpose and philosophy	Why the company does CSR and how it links to its values
2	Legal basis and applicability	Section 135, the CSR Rules, Schedule VII; who the policy covers
3	Focus areas	Two to four Schedule VII items, with reasons and target geographies
4	Local area preference	How you give preference to areas around your operations, per Section 135(5)
5	Delivery routes	Direct projects, CSR-1 registered agencies, collaborations, and ZCZP instruments if used
6	Agency selection and due diligence	Track record, CSR-1 registration, financial checks, conflict-of-interest rules
7	Governance	Roles of the Board, CSR Committee, CFO and CSR team
8	Annual Action Plan process	Who prepares it, by when, and what it contains
9	Monitoring and reporting	Field reviews, utilisation certificates, CFO certificate, impact assessment where due
10	Unspent amounts, surplus and capital assets	Treatment under Sections 135(5) and (6) and Rule 7
11	Review	How often the policy is reviewed and who can amend it

Sample wording for three key sections

Focus areas: “The Company will focus its CSR on (a) school education and (b) skilling for youth, under item (ii) of Schedule VII, in districts where it operates.”

Replace these with your own chosen items. Do not list all of Schedule VII.

Delivery routes: “Projects may be implemented directly or through entities registered in Form CSR-1. Up to 10% of CSR spend may be routed through Zero Coupon Zero Principal instruments on a Social Stock Exchange, as permitted by Rule 4A.”

Keep the ZCZP line only if the Board wants that option.

Review: “The CSR Committee will review this policy at least once every three years, or earlier if the law or strategy changes.”

What must the policy say about money rules?

The policy does not need to repeat the law in full. It should commit the company to these rules:

• Administrative overheads: capped at 5% of total CSR expenditure for the year (Rule 7(1)).
• Surplus: any surplus from CSR activities is not business profit. It goes back into the project, the Unspent CSR Account or a Schedule VII fund (Rule 7(2)).
• Excess spend: can be set off over the next three years with a Board resolution (Rule 7(3)).
• Capital assets: must be held by an eligible entity or beneficiaries, not the company (Rule 7(4)).
• Unspent amounts: follow the 30-day and six-month transfer deadlines in Sections 135(5) and (6).

Our separate guide covers the unspent CSR account in detail.

How is a CSR policy approved?

Follow these steps for a first policy.

1. Confirm applicability from the previous year’s audited figures.
2. Constitute the CSR Committee, or record that the Board will act under Section 135(9).
3. Draft the policy. The Committee formulates it and recommends it to the Board.
4. Approve it at a Board meeting. Record the approval in a Board resolution.
5. Publish it on the website with the Committee’s composition.
6. Prepare the first Annual Action Plan for Board approval, in line with the policy.
7. Disclose it in the Board’s Report through the annual report on CSR.

Approval checklist

• ☐ Applicability confirmed from last year’s audited financial statements
• ☐ CSR Committee constituted, or Board discharge recorded
• ☐ Committee’s recommendation minuted
• ☐ Board resolution approving the policy passed
• ☐ Policy, Committee composition and approved projects on the website (Rule 9)
• ☐ Annual Action Plan approved for the year
• ☐ Web link to the policy included in the annual report on CSR

Where must the CSR policy be disclosed?

There are two places. Section 135(4) requires the Board to disclose the policy’s contents in its report. It must also place the policy on the company’s website, if it has one.

Rule 9 adds detail. The Board must disclose the Committee’s composition, the CSR policy and projects approved by the Board on the website. The annual report on CSR in the Board’s Report then gives the web link.

What are the most common CSR policy drafting mistakes?

1. Listing every Schedule VII item. It signals no strategy and gives the Board nothing to steer by.
2. Putting budgets in the policy. The policy then needs Board changes every year.
3. No agency due-diligence criteria. Paying an NGO without a valid CSR-1 number is a compliance failure.
4. Ignoring local preference. Section 135(5) asks for preference to local areas.
5. No link to monitoring. The Board must ensure the policy’s activities are carried out.
6. Copying an old pre-2021 policy. Old policies often hold detail that now belongs in the Annual Action Plan.

Frequently asked questions

Is a CSR policy mandatory?

Yes, for every company covered by Section 135. The CSR Committee formulates it, or the Board does if the obligation is ₹50 lakh or less. The Board must approve it.

Who approves the CSR policy?

The Board approves it after considering the CSR Committee’s recommendations. Record the approval in a Board resolution. The Board must also ensure the activities in the policy are carried out.

Does the CSR policy need to be on the website?

Yes, if the company has a website. Section 135(4) and Rule 9 require the policy, the Committee’s composition and approved projects to be published. The Board’s Report must also disclose the policy.

What is the difference between a CSR policy and an Annual Action Plan?

The policy sets long-term direction: focus areas, routes and governance. The Annual Action Plan lists the year’s projects, execution modes, fund use and schedules. The Board approves both on the Committee’s recommendation.

How often should a CSR policy be reviewed?

The law sets no fixed period. Review it at least every three years, or earlier if strategy or the law changes. The 2026 ZCZP amendment is a good trigger for a review now.

Can a company use a CSR policy template from the internet?

As a starting point, yes. Generic templates often list every Schedule VII item and pre-2021 detail. Tailor focus areas, routes and governance to your company.

How SCORE helps

SCORE drafts CSR policies that are specific enough to guide decisions and stable enough to last. We pair each policy with an Annual Action Plan, Board resolutions and CSR-1 agency vetting.

Drafting your first CSR policy? Get your CSR policy drafted by SCORE and ask for our CSR Policy Template and CSR Planning Template.

Sources

• Companies Act, 2013 and rules (India Code)
• National CSR Portal (Ministry of Corporate Affairs)

This article is general information, not professional advice.