MCA Allows CSR Spending Through Zero Coupon Zero Principal Instruments

The Ministry of Corporate Affairs, through its notification dated 27 May 2026, has amended the Companies (Corporate Social Responsibility Policy) Rules, 2014, to permit companies to carry out CSR activities through "zero coupon zero principal instruments" securities issued by “Not for Profit Organisations” listed on the Social Stock Exchange segment, in accordance with SEBI regulations. Such expenditure cannot exceed 10% of a company's total CSR spend for the financial year.

Companies investing through this route are exempted from conducting an impact assessment for the funded project. The Not for Profit Organisation issuing the instrument must complete the project within three financial years, and on termination of listing, transfer any unspent amount to a Schedule VII fund along with a compliance report filed with SEBI.