Companies Act

CSR implementation through zero coupon zero principal instruments

Corporate Social Responsibility implementation through zero coupon zero principal instruments

Ministry of Corporate Affairs (MCA) has authorised Corporate Social Responsibility (CSR) implementation through zero coupon zero principal instrument.

The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2026 provides that a company may carry out Corporate Social Responsibility activities through a zero coupon zero principal instrument. Provided that the expenditure incurred for such instrument shall not exceed ten percent of the total Corporate Social Responsibility expenditure of such company for that financial year.

It is further provided that the company that has subscribed in a zero coupon zero principal instrument shall be exempted from undertaking impact assessment of any project funded by such an instrument.

The Not for Profit Organisation issuing the zero coupon zero principal instrument and raising fund therefrom shall – (a). undertake a project with a duration not more than three succeeding financial years from the issue of such zero coupon zero principal instrument; and (b). on termination of listing of such zero coupon zero principal instrument, transfer the unspent amount to any fund included in Schedule VII to the Act and submit its compliance report to the Securities Exchange Board of India. Further, the existing provisions of rule 4, except sub-rules (5) and (6) shall be applicable to the implementation of Corporate Social Responsibility through a zero coupon zero principal instrument.

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