CSR Rules, Amendment 2022 - on unspent Budget

How do companies who have given a one-time grant to NGOs account for unspent CSR funds?[CSR Rules, Amendment 2022]



       If companies have provided “One time grant” to the NGOs, that grant has to be spent within one financial year by the NGO.

       If the project does not stretch over the  financial year. These projects can be categorised under “other than ongoing projects” in the annual action plan.

       Under  the annual action plan, the CSR Committee of the company is required to provide modalities for utilisation of funds.

       The CSR Committee shall recommend to the Board on budget allocation for any CSR project including modalities of utilisation of funds in every project.

       Funds allocated to such “other than ongoing projects” has to be spent within one financial year and there shouldn’t be unspent at the end of the financial year.

       If there is an unspent CSR amount, NGOs should return unspent funds to the companies and companies are not permitted to spend the unspent CSR amount which is related to “other than ongoing projects’ ‘, on any CSR activity during the intervening period of six months after the end of the financial year.

       Such unspent CSR amount is required to be transferred to any fund included in Schedule VII of the Act within 6 months from the end of the previous financial year.

       If companies foresee that there will be an unspent CSR amount at the end of the financial year, they may take the decision to categorise those projects as ongoing projects as well based on reasonable justification. Definition of ongoing projects can be referred below.


Companies who have written a cheque to their own foundation who in turn are supporting NGOs and there is an unspent CSR amount at foundation level

       The similar treatment would be followed as per above. Two points to keep in mind: 

       Foundations are to be treated as first recipient of the CSR amount just like NGOs receive CSR amount from companies directly.

       All formalities related to getting unspent CSR amount from the foundation/NGOs and depositing into a separate unspent CSR amount or depositing into any fund included in Schedule VII of the Act, as the case may be, should be done by companies itself. A foundation cannot do so on behalf of the companies.

Companies who have given FCRA funds: If there is unspent FCRA funds at the end of the financial year

       It can be spent in the next financial year as per agreed project objectives and existing agreement with the donor. The agreement should be valid in the next financial year as well.

       If there is unspent FCRA funds at the end of project period, the modalities of the unutilised balance can be decided in consultation with the donor and as per donor’s direction.

       FCRA funds cannot be returned to the donor.

       Also, FCRA funds cannot be onward granted / sub-granted by the NGO

Will funds at the 2nd  implementing agency account be treated as unspent or not ?  If a company’s foundation transfers money to NGO hence there is nil balance in their account, whose utilisation is considered final- the foundation or implementing agency?

Implementing agency utilisation would be final and an unspent amount should be considered as per implementing agency account.


If it is unspent on 31st March , would the  2nd implementing agency need to transfer money back to the foundation account?

Yes, and the foundation will return an unspent amount to companies back.

Can a company’s foundation open an unspent account on behalf of the company?

No, Companies need to open their own unspent account