CSR Tree Plantation in India: What Actually Qualifies Under Schedule VII in 2026
Most corporate tree plantation projects in India are not killed bydrought. They are killed by an auditor asking one question: where is theproof? A company writes a cheque. An NGO plants saplings. Someone from the CSRteam flies down, holds a spade for a photograph, and the LinkedIn postgoes up by evening. Eighteen months later the statutory auditor asks forthe geo-coordinates, the species list, the survival data and theimplementing agency’s CSR-1 registration number, and nobody in the roomhas any of it. That is not a plantation problem. That is a documentation problem — andin 2026, with the Ministry of Corporate Affairs tightening itsinterpretation of what a defensible CSR project looks like, it hasbecome an expensive one. This piece breaks down exactly where tree plantation sits in India’s CSRlaw, what makes a project eligible, and what your file needs to containbefore an auditor opens it. FIRST: DOES TREE PLANTATION EVEN COUNT AS CSR? Yes — and the basis is narrower than most people assume. CSR-eligible activity in India is not defined by good intentions. It isdefined by Schedule VII of the Companies Act, 2013, a closed list ofcategories read together with MCA circulars. Tree plantation falls under item (iv) — ensuring environmentalsustainability, ecological balance, protection of flora and fauna,animal welfare, agroforestry, conservation of natural resources andmaintaining quality of soil, air and water. Three things follow from that wording, and each one has tripped up realcompanies: This matters. A plantation programme that puts fruit-bearing ormedicinal species on farmer land, with an income stream attached, sitssquarely inside Schedule VII. It is not a stretched interpretation. MCA’s consistent position is that there must be a direct, defensiblelink between the activity and the Schedule VII category. Landscaping the corporate campus does not survive this test. Plantinginside a factory boundary primarily for aesthetics does not either — andif the benefit accrues mainly to employees, it is disqualified outright,because CSR cannot be spent on activities carried out exclusively foremployees and their families. If you are a nursery, a timber company or a landscaping firm, plantationis your business, not your CSR. WHO IS ACTUALLY LIABLE? CSR applies to any company — private, public, listed, unlisted, Section8, or the Indian arm of a foreign parent — that crosses any one of threethresholds in the immediately preceding financial year: Cross one, and the obligation triggers: spend at least 2% of the averagenet profits of the three immediately preceding financial years,calculated under Section 198 of the Act — not under the Income Tax Act. That distinction alone accounts for a fair number of computation errors. Worth watching: the Companies (Amendment) Bill, 2025, still pending,proposes pulling those thresholds down to ₹100 crore net worth, ₹500crore turnover and ₹3 crore net profit. If it passes in its current form, a large band of mid-market Indiancompanies enters the CSR net for the first time — most of them withoutan in-house CSR function. THE FOUR DOCUMENTS THAT DECIDE WHETHER YOUR SPEND SURVIVES AUDIT Here is where plantation projects actually fail. Not in the field. Inthe file. If you are routing CSR spend through an NGO, trust, society or Section 8company, that entity must be registered with the MCA via Form CSR-1 andhold a valid CSR Registration Number. This has been mandatory since 1April 2021. No CSR-1, no valid spend. It is that binary. Ask for the CSRN before thefirst tranche leaves your account, and put it in the agreement. The CSR Committee must formulate, and the Board must approve, an AnnualAction Plan specifying the list of projects, the manner of execution,modalities of fund utilisation, and — critically — the monitoring andreporting mechanism. For a plantation project, “monitoring mechanism” cannot read “periodicreview by the CSR team.” That is what a weak file looks like. A strongone names the survival audit schedule, the verification method, and whosigns off. Form CSR-2 is the annual CSR report filed with the MCA, submittedthrough the V3 portal, and it requires project-level disclosure — not alump-sum environment number. Project name, location, duration, amount spent, implementing agency andCSRN, mode of implementation. If your plantation project cannot be described at that granularity, itcannot be filed cleanly. Companies with an average CSR obligation of ₹10 crore or more over thethree immediately preceding financial years must have qualifyingprojects assessed by an independent agency. The assessment report goesto the Board and is annexed to the annual CSR report. An impact assessor evaluating a tree plantation project will ask forbaseline land condition, species-wise planting records, survivalpercentage against a defined measurement window, and evidence ofcommunity involvement. If the only artefact is an invoice for “50,000 saplings,” the assessmentwill say so in writing, and that document becomes part of your permanentrecord. TWO STRUCTURAL CHOICES THAT QUIETLY DECIDE EVERYTHING STRUCTURE IT AS AN “ONGOING PROJECT” An ongoing project is a multi-year project with a duration not exceedingthree financial years, excluding the year of commencement, and it mustbe identified as such by the Board. This is the single most useful structuring decision available to aplantation programme, for a simple reason: trees do not become anoutcome in twelve months. A one-year plantation project forces you to report success at the exactmoment when survival data is least meaningful. A three-year ongoingproject lets you fund planting in Year 1 and maintenance, replacementand survival auditing in Years 2 and 3 — which is what actually producesa forest. It also changes fund treatment. Unspent amounts on an ongoing project go to a dedicated Unspent CSRAccount under Section 135(6), to be transferred within 30 days of theend of the financial year, and spent within three financial years. Unspent amounts on a non-ongoing project go straight to a Schedule VIIfund within six months. Misclassify, and you have a compliance breach that has nothing to dowith the trees. WATCH THE 5% ADMINISTRATIVE OVERHEAD CAP Administrative overheads are capped at 5% of total CSR expenditure forthe financial year. The recurring dispute in plantation programmes: is monitoring cost anadministrative overhead, or is it project cost? The defensible position is that monitoring which is intrinsic to projectdelivery is project expenditure — a survival