Section 135 Made Simple: Youth Development Projects That Qualify for CSR in India

Indian companies spent close to Rs 35,000 crore on CSR in 2023-24, and education attracted more of it than any other sector. Yet many CSR teams still pause at a basic question: does a youth leadership course, a skills bootcamp or a girls’ football programme actually count? The answer matters to the young people these programmes serve, because funding that is wrongly classified can be disallowed, delayed or quietly cut. This guide explains which youth projects qualify under Section 135 and Schedule VII, who can deliver them, and what separates an eligible project from an effective one.

The Short Answer

A youth development project qualifies as CSR in India when it can be related to an activity listed in Schedule VII of the Companies Act, 2013, is carried out in India, does not benefit only the company’s own employees, is not marketing sponsorship, and is delivered by the company itself or by an eligible implementing agency.

Most youth projects fall under the Schedule VII entry on education and employment-enhancing vocational skills. Others fit the entries on gender equality and reducing inequalities, preventive health care, sports training or rural development. The Ministry of Corporate Affairs has long held that Schedule VII should be read liberally, so a well-designed youth programme rarely struggles to find a home. The harder questions are about delivery, duration and impact.

Which Companies Section 135 Applies To

India made CSR spending a legal obligation from 1 April 2014. Under the current law, Section 135 applies to a company that, in the preceding financial year, had a net worth of at least Rs 500 crore, a turnover of at least Rs 1,000 crore, or a net profit of at least Rs 5 crore. Such a company must spend at least 2% of its average net profit over the three preceding financial years on activities in its CSR policy, which must relate to Schedule VII. A company whose CSR obligation is Rs 50 lakh or less does not need to form a separate CSR Committee.

A Change Under Discussion

These thresholds may soon move. The Corporate Laws (Amendment) Bill, 2026, introduced in the Lok Sabha on 23 March 2026, would raise the net profit threshold to Rs 10 crore and allow companies meeting prescribed conditions to be exempted from CSR provisions. It would also give companies 90 days instead of 30 to move unspent money for ongoing projects into a dedicated account.

A Joint Parliamentary Committee reported on the Bill on 3 August 2026. According to Fox Mandal’s summary, it endorsed raising the net profit trigger to Rs 10 crore and the CSR Committee exemption from Rs 50 lakh to Rs 1 crore. At the time of writing, we could not confirm that Parliament had passed the Bill, so the current thresholds still apply. Check the latest position before finalising your CSR plan.

Where Youth Development Fits in Schedule VII

Schedule VII does not mention “youth” as a single category, which is why so many teams hesitate. In practice, youth programmes map onto several entries:

• Education and vocational skills: promoting education, special education and employment-enhancing vocational skills, especially among children, women, the elderly and people with disabilities, along with livelihood enhancement projects. This covers remedial classes, STEM learning, digital skills, career readiness, apprenticeship preparation and most employability programmes.
• Gender equality and reducing inequality: promoting gender equality, empowering women, and measures to reduce inequalities faced by socially and economically backward groups. This suits leadership programmes for young women and projects designed for marginalised communities.
• Health: preventive health care, nutrition and sanitation. Adolescent health education, menstrual hygiene awareness and nutrition programmes for school-age children can fit here.
• Sport: training to promote rural sports, nationally recognised sports, Paralympic sports and Olympic sports. Structured sports training for young people qualifies. A branded tournament designed for visibility does not.
• Rural development: rural development projects, which can include livelihood and enterprise support for rural youth.

The Government of Odisha’s CSR portal sets out these Schedule VII categories in plain language. The Ministry’s guidance has also clarified that activities need only be relatable to Schedule VII, and that its entries should be read liberally to capture the essence of each subject.

What Does Not Count

Eligibility has firm edges. A project will not qualify as CSR if it:

• Benefits only the company’s employees and their families
• Takes place outside India
• Involves a contribution, direct or indirect, to a political party
• Is sponsorship designed to deliver marketing benefits for the company’s products or services
• Fulfils an obligation the company already has under another law
• Forms part of the company’s normal course of business

The employee rule catches many youth initiatives. An internship scheme open only to employees’ children is staff welfare, not CSR. A skills programme that trains young people exclusively for the company’s own vacancies may also be challenged as normal business activity.

Who Can Deliver a Youth CSR Project

A company can run a programme itself, but most work through partners. Since the 2021 amendments to the CSR Rules, an eligible implementing agency includes a Section 8 company, registered public trust or registered society that holds 12A and 80G registration under the Income Tax Act and has an established track record of at least three years in similar activities. Every entity that intends to undertake CSR activity must also register with the Central Government by filing Form CSR-1, which has applied since 1 April 2021.

In practice, a CSR team should ask any prospective partner for four documents before approving a youth project: its registration certificate, its 12A and 80G registrations, its CSR registration number from Form CSR-1, and evidence of at least three years of comparable work.

Multi-Year Projects, Unspent Funds and Impact Assessment

Youth development rarely fits inside one financial year. A young person’s journey from school to a first job can take two or three years. The CSR Rules recognise this through the idea of an ongoing project.

When money allocated to an ongoing project is unspent at year end, the company must transfer it within 30 days into an Unspent CSR Account at a scheduled bank and spend it within the following three financial years. Unspent amounts not linked to ongoing projects must instead be transferred to a Schedule VII fund within six months of the financial year’s end.

Larger programmes carry an evaluation duty. Companies with an average CSR obligation of Rs 10 crore or more over the three preceding years must commission an independent impact assessment of projects with outlays of Rs 1 crore or more, once those projects have been completed for at least a year.

For youth development, these rules are an opportunity rather than paperwork. The ongoing-project mechanism lets a company commit to a cohort of young people for the full length of their transition, rather than funding a single term and stopping.

Where CSR Money Goes Today

The scale of Indian CSR is significant. According to a Ministry of Corporate Affairs reply drawing on National CSR Portal data, total CSR spending rose from Rs 24,965.82 crore in 2019-20 to Rs 34,908.75 crore in 2023-24. As reported by The CSR Journal, education alone received Rs 12,134.57 crore in 2023-24, about 35% of the total, and Maharashtra received more than 17% of all CSR spending nationally. Portal figures are revised as companies update their filings, so different publications may show slightly different totals for the same year.

Meanwhile, the labour market tells a more complicated story about young people. According to the Periodic Labour Force Survey Annual Report 2025, published by the Ministry of Statistics and Programme Implementation, the unemployment rate for people aged 15 to 29 fell from 10.3% in 2024 to 9.9% in 2025. For urban youth it remained much higher, at 13.6%, compared with 8.3% for rural youth. MoSPI has noted that the survey’s sample design was revamped from January 2025, so comparisons with earlier years need care.

Read together, these figures suggest a gap worth noticing. Large sums already flow into education, yet a sizeable share of young people still struggle at the point where education is meant to turn into work. Youth unemployment reflects many structural factors, including local labour markets, the quality and relevance of training, social networks and the cost of searching for work. It is not simply a matter of individual effort, and no CSR programme can solve it alone. But it does indicate where carefully designed CSR can add the most value.

From Eligible to Effective

Eligibility is a legal test. Effectiveness is a developmental one. A project can satisfy every requirement of Section 135 and still leave young people where it found them.

Three questions help a CSR committee move from the first to the second.

Does it bridge a transition? The most fragile moments in a young person’s life are transitions: from school to further study, from training to a first job, from a first job to a stable one. Programmes that end with a certificate, rather than with a placement, a mentor or an enterprise plan, often stop just before the point of greatest need.

Does it last long enough? Confidence, skills and professional networks take time to build. The ongoing-project rules allow funding to follow a cohort over several years. Using them deliberately is one of the simplest ways to raise impact without raising the budget.

Do young people help shape it? Programmes designed with participants tend to fit their circumstances better: the hours they can attend, the jobs that exist near them, the barriers they actually face. At YUVA, we believe young people should take part in decisions about the programmes intended to support them.

“Schedule VII can tell a company what it may fund. Only young people can tell it what they need.”

For a closer look at how companies and NGOs can structure partnerships around outcomes rather than outputs, our article on how companies can partner with NGOs for real impact sets out models that apply well beyond Mauritius. Our piece on what actually works in youth empowerment explores the same question from the young person’s side.

Before your next CSR Committee meeting, consider:

• Are your youth programmes measured by how many certificates were issued, or by how many young people reached their next step?
• Which young people in your districts are least likely to hear about your programme, and how would you reach them?
• If a cohort needed three years of support, would your CSR plan allow you to stay with them?

Building What Comes Next

India’s CSR law has made corporate responsibility measurable in rupees. The next step is making it measurable in lives that move forward: the first-generation graduate who finds work in her field, the young man in a small town who turns a training course into a business, the student who stays in school because someone noticed she was falling behind. Section 135 creates the obligation. Thoughtful design creates the opportunity.

YUVA works with children and young people across Mauritius and India in education, health, empowerment and employment. If your company is planning youth-focused CSR, you can explore partnership opportunities with YUVA.