CSR and Corporate Gifting: The Complete Guide for Indian Companies Under Section 135

Section 135: understanding your CSR obligation

Companies with a net worth of Rs.500 crore+, turnover of Rs.1,000 crore+, or net profit of Rs.5 crore+ must spend 2% of average net profits on CSR activities aligned with Schedule VII of the Companies Act. Schedule VII includes: livelihood enhancement, welfare of differently-abled persons, women's empowerment, protection of national heritage, and environmental sustainability — every one of which maps directly to the work done by gifting-focused NGOs across India.

How NGO gifting contributes to CSR goals

•        Livelihood enhancement: purchasing from women's SHGs, tribal artisan cooperatives, and rural craft NGOs directly generates income for marginalised communities

•        Welfare of differently-abled persons: organisations like GiftAbled, Atypical Advantage, and Kshitij employ PwDs — purchasing their products funds vocational programmes and dignified employment

•        Protection of national heritage: purchasing from NGOs like Dastkar and Craftizen supports handloom and craft traditions at risk of extinction

•        Women's empowerment: SHG products and women-led craft cooperatives fall clearly within this Schedule VII category

BRSR reporting and NGO gifting

SEBI's BRSR framework — mandatory for listed companies — requires disclosure across nine principles. NGO gifting directly strengthens three of them: Principle 1 (integrity — transparent supply chain sourcing), Principle 5 (human rights — fair wages in the supply chain), and Principle 8 (inclusive growth — direct economic benefit to marginalised communities).

Building a CSR-aligned gifting programme: step by step

Step 1: Choose your CSR impact area

Align your NGO gifting with your declared CSR focus. Women's empowerment focus: choose women artisan SHGs. Disability inclusion: choose GiftAbled or Kshitij. The alignment between your gifting and your CSR narrative creates a coherent, communicable story.

Step 2: Vet your NGO partners

For CSR documentation, partners must be registered as a Section 8 company, Trust, or Society; hold a current 80G exemption; provide GST invoices; and maintain annual impact reports with beneficiary data.

Step 3: Document the transaction

For each NGO gifting transaction, retain: NGO registration and 80G certificate, GST invoice, description of the NGO's programme and beneficiary community, number of artisans whose products were purchased, per-artisan income data if available, and photographs with consent.

Step 4: Report and communicate

Include NGO gifting in your annual CSR report under the relevant Schedule VII category and quantify the impact: "Our gifting programme sourced Rs.XX lakh from [X] NGOs, supporting [Y] artisans from [Z] communities." Communicate internally at gifting time — employees who understand the social impact are significantly more engaged with and proud of the programme.

Does NGO gifting count toward the 2% CSR requirement?

Typically, gifts purchased from NGOs are commercial transactions, not direct CSR contributions. However, if structured as a donation with an 80G receipt, or as a formal CSR project with an MOU and programme reporting, it can qualify. Even outside formal CSR accounting, NGO gifting strengthens your BRSR disclosures and overall ESG narrative significantly. Consult your CSR committee and legal team to determine the optimal structure.

Tecido helps companies build NGO gifting programmes aligned with CSR and ESG goals. Contact us at info@tecidoglobal.com.