The Ministry of Corporate Affairs has notified the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2026.
New Definitions Introduced
Two new definitions have been inserted in Rule 2(1):
Not for Profit Organization (NPO) – Not for Profit Organization” has the same meaning as in clause (e) of regulation 292A of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.
Zero Coupon Zero Principal (ZCZP) Instrument – means an instrument declared as a security that is issued by a Not for Profit Organization registered with the Social Stock Exchange segment of a recognised Stock Exchange in accordance with the regulations made by the Securities and Exchange Board of India.
New Rule 4A – CSR Implementation via ZCZP Instruments
A new Rule 4A has been inserted after Rule 4, permitting companies to fulfil CSR obligations through ZCZP instruments, subject to the following conditions:
For the Subscribing Company:
CSR expenditure through ZCZP instruments is permitted but capped at 10% of the company's total CSR spend for that financial year.
The subscribing company is exempt from conducting impact assessment of any project funded through such instruments, providing meaningful compliance relief.
For the Issuing NPO:
Must undertake projects with a duration not exceeding three succeeding financial years from the date of issuance of the ZCZP instrument.
Upon termination of listing of the instrument, any unspent funds must be transferred to a fund specified under Schedule VII of the Companies Act, 2013, and a compliance report must be submitted to SEBI.
Applicability of Rule 4:
The general CSR implementation provisions under Rule 4 will apply to ZCZP-based CSR activities as well, except sub-rules (5) and (6), which deal with ongoing project treatment and unspent amount transfers as these aspects are specifically governed under the new Rule 4A