CSR-1 vs 80G - the difference and what corporates actually need

Two of the most-confused registrations in Indian NGO compliance. They sound similar - both involve corporates donating to NGOs - but they're issued by different ministries, serve different purposes, and apply to different donor types. This guide explains both, when each is required, and how they interact when a corporate CSR donor lands at your door.

The 30-second version

CSR-1 - in detail

The Companies Act 2013 (§135) requires every Indian company that meets thresholds (net worth ≥ ₹500 cr, OR turnover ≥ ₹1,000 cr, OR net profit ≥ ₹5 cr) to spend at least 2% of its 3-year average net profit on CSR activities.

Companies don't typically run their own programmes - they channel CSR funds to NGOs. As of the 2021 amendment, NGOs receiving CSR must be registered under Form CSR-1 with the MCA. Without CSR-1, the company cannot count that donation toward its 2% obligation.

CSR-1 eligibility (per Rule 4(1) of CSR Rules):

• Section 8 company, public trust, or registered society
• Valid 12A or 10(23C) approval
• Valid 80G approval
• 3 years of established track record in carrying out programmes (this is the "new entity" gating - startup NGOs cannot get CSR-1 until they've been operational for 3 years)
• NGO Darpan ID
• PAN of the NGO
• DSC of the authorised signatory

CSR-1 filing process:

1. Log in to mca.gov.in with the NGO's PAN-linked credentials
2. Navigate to MCA Services → Company Forms → CSR-1
3. Fill in NGO details, registration certificate numbers, board details
4. Upload documents (PAN, 12A, 80G, trust deed, Darpan certificate, 3-year financials)
5. DSC sign + submit
6. MCA approves typically in 15-21 days. You receive a unique CSR Registration Number - share this with every corporate donor

What corporates ask for:

• Your CSR Registration Number (issued post-CSR-1 approval)
• NGO Darpan ID
• Latest audited financials
• Programme proposal aligned to Schedule VII activities
• Quarterly utilisation reports + impact metrics
• Form CSR-2 from your end (utilisation certificate after grant ends)

80G - in detail

Section 80G of the Income-Tax Act allows donors (individuals, companies, HUFs) to claim a tax deduction for donations made to approved charitable institutions. Two sub-clauses:

• 80G(2)(a)(iv) - 100% deduction (without qualifying limit): PM CARES, PM National Relief Fund, National Defence Fund, Swachh Bharat Kosh, etc. Restricted to specific government funds.
• 80G(5) - 50% deduction (with qualifying limit): All other approved NGOs. The limit is 10% of the donor's adjusted gross total income.

Most NGOs fall under 80G(5) - donor claims 50% deduction, capped at 10% of their AGTI.

80G prerequisites:

• 12A (or 12AB) registration
• NGO Darpan ID
• PAN of the NGO
• 2 years of financial activity (for fresh applications)
• Trust deed / MOA

How donors claim:

1. NGO issues Form 10BE certificate to the donor after filing Form 10BD by 31 May
2. Donor includes the 10BE certificate's ARN + amount in their ITR (Schedule 80G)
3. System reconciles against AIS (see AIS reconciliation guide)
4. Donor gets 50% (or 100%) deduction applied to their tax computation

How they interact at a corporate CSR donation

A company gives ₹10 lakh to your NGO. Both certificates kick in:

1. Corporate side: ₹10 lakh counts toward their §135 CSR obligation (2% of 3-year average net profit). They report it in their CSR-2 form filed at MCA.
2. NGO side: You issue a Form 10BE to the company (yes, companies get 10BE too if they want to claim 80G). The ₹10 lakh appears in your Form 10BD filing.
3. Corporate side again: The company can ALSO claim 80G deduction for the same donation IF they treat it as a non-CSR donation (rare - most companies choose CSR treatment). However, the same donation cannot be double-counted: either CSR (for §135) or 80G (for §80G), pick one.

Most corporates treat the donation as CSR and don't claim 80G. They get the §135 compliance benefit; they forgo the additional 80G tax saving.

The "if I only have one, can I receive corporate money?" question

• Only 80G, no CSR-1: A company can donate, but the donation does not count toward their 2% CSR obligation. They'd have to additionally spend 2% elsewhere. Most corporates won't make this donation; it's just a regular grant for them.
• Only CSR-1, no 80G: Impossible. CSR-1 prerequisites include 80G. If you have CSR-1, you have 80G by definition.
• Both: Standard state. Corporate gets §135 credit, your donor gets 80G option, you're optimised for both donor types.

Common mistakes

1. NGO advertises "CSR-eligible" without CSR-1. Corporates discover during due diligence and walk away.
2. NGO has CSR-1 but no separate accounting bucket for CSR funds. CSR money must be tracked separately and utilised within stipulated timelines (typically 3 years for ongoing projects; 1 year otherwise). Commingling with general funds is a Rule 4 violation.
3. NGO accepts CSR money for activities not in Schedule VII. The corporate's spend won't count as CSR. They'll claw back the donation.
4. NGO uses CSR money for admin. CSR Rule 7(1) caps administrative overheads at 5% of CSR spend. Stricter than the FCRA 20% rule.
5. NGO issues a donation receipt instead of CSR utilisation certificate. Different documents - utilisation certificate is required for the corporate's CSR-2 audit.

Filing fees and timelines

Frequently asked questions

Do I need both CSR-1 and 80G? If you want corporate CSR money - yes. If only individual donors - only 80G.

Is CSR-1 the same as 12A? No. 12A is income-tax registration (charitable status). CSR-1 is MCA registration to receive CSR.

Can a Section 8 company claim 80G itself? No - Section 8 companies are non-profit. They issue 80G receipts; they don't claim 80G as donors. (They can claim their own §11 exemption for their income.)

Does CSR-1 cover all corporates or only Indian ones? Only Indian companies governed by the Companies Act. Foreign-funded NGOs cover that via FCRA, which is independent.

What if my NGO doesn't have 3 years of track record yet? You can't get CSR-1. Operate for 3 years on individual donations + grants, then apply.

Are CSR funds 80G-eligible for the donating corporate? Yes in principle, but you can't claim both. Most corporates choose CSR treatment.