## Activities Excluded from CSR (Rule 2(1)(d) / Rule 4)

The following shall NOT be considered as CSR activities:

1. Outside India: CSR projects or programmes or activities undertaken outside India.

2. Employee-Only Benefit: CSR projects or programmes or activities that benefit only the employees of the company and their families.

3. Political Contributions: Contribution of any amount directly or indirectly to any political party under Section 182 of the Act.

4. One-Off Events: CSR activities must be undertaken in project/programme mode. One-off events such as:

Marathons
Awards
Charitable contributions
Advertisements
Sponsorships of TV programmes

…would NOT qualify as CSR expenditure.

5. Statutory Compliance Expenses: Expenses incurred for the fulfilment of any Act/Statute or regulations (e.g., Labour Laws, Land Acquisition Act) — these do NOT count as CSR.

Worked example

### Example 1

Example 1: ABC Ltd. funds an education initiative in Nepal. ❌ Not CSR (outside India).

### Example 2

Example 2: XYZ Ltd. organises a free health camp only for its own employees and their families. ❌ Not CSR (employee-only benefit).

### Example 3

Example 3: PQR Ltd. sponsors a charity marathon as a one-off event. ❌ Not CSR (one-off event, not project mode).

### Example 4

Example 4: A factory spends ₹10 lakh on pollution control mandated under the Environment Protection Act. ❌ Not CSR (statutory compliance).

⚠️ Common exam mistakes

Treating sponsorship of marathons/awards as CSR — they are one-off events.
Counting employee welfare expenses as CSR.
Claiming pollution control / labour law compliance as CSR.
Allowing expenditure outside India (e.g., for a foreign affiliate community).

Bare-Act text Rule 2(1)(d) · Companies (CSR Policy) Rules, 2014 · click to expand

'Corporate Social Responsibility (CSR)' means the activities undertaken by a Company in pursuance of its statutory obligation laid down in section 135 of the Act in accordance with the provisions contained in these rules, but shall not include the following, namely: – (i) activities undertaken in pursuance of normal course of business of the company; (ii) any activity undertaken by the company outside India except for training of Indian sports personnel; (iii) contribution of any amount directly or indirectly to any political party under section 182 of the Act; (iv) activities benefitting employees of the company; (v) activities supported by the companies on sponsorship basis for deriving marketing benefits; (vi) activities carried out for fulfilment of any other statutory obligations under any law in force in India.

Now that you've read this — what's next?

Move from understanding → mastery in 3 clicks. Each option below picks up from this lesson's topic.

🔥 Drill 5 Qs on this → ✍️ Adaptive practice →

CSR – Activities NOT considered as CSR

Worked example

⚠️ Common exam mistakes