CSR Tree Plantation under Schedule VII

Yes, tree plantation is an eligible CSR activity in India. It falls under item (iv) of Schedule VII to the Companies Act, 2013, which covers "ensuring environmental sustainability, ecological balance, protection of flora and fauna… agroforestry, conservation of natural resources and maintaining quality of soil, air and water". To count towards your Section 135 obligation, the project must be approved by your Board, run directly or through a CSR-1 registered implementing agency, and reported in your annual report on CSR. This guide covers those rules step by step. For the business case and ESG reporting, see our Corporate Tree Planting CSR & ESG guide.

Who Has to Spend on CSR

Section 135 applies to a company that, in the immediately preceding financial year, had any one of:

a net worth of ₹500 crore or more;
a turnover of ₹1,000 crore or more; or
a net profit of ₹5 crore or more.

These companies must spend at least 2% of their average net profits from the three immediately preceding financial years on CSR activities in line with Schedule VII.

The Corporate Laws (Amendment) Bill, 2026 proposes raising the net profit trigger to ₹10 crore. As of 23 October 2026 it has been reviewed by a Joint Parliamentary Committee but has not been passed, so the ₹5 crore threshold still applies.

What Schedule VII Item (iv) Says

The full text of item (iv), as amended, reads:

"ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water including contribution to the Clean Ganga Fund set-up by the Central Government for rejuvenation of river Ganga"

Native tree plantation fits this item directly: it restores green cover, protects soil and gives habitat to birds and insects. Agroforestry is named in the item itself. A school greening programme may also support education (item ii). Name the main item in your CSR policy and annual action plan.

What Doesn't Count as CSR

The Companies (CSR Policy) Rules, 2014 exclude some activities even when they look environmental. According to Rule 2(1)(d) and the Ministry of Corporate Affairs (MCA) FAQs, these don't qualify:

Activities in the normal course of your business. A landscaping company planting trees for paying clients is doing business, not CSR.
Activities that benefit only your employees. A drive designed only for staff, such as planting at your own office campus, doesn't count. Employees can join a public project and benefit along the way.
Sponsorship for marketing benefit. A one-off branded publicity event isn't CSR, though brand building as a side benefit is allowed.
Activities outside India.
Contributions to political parties.
Activities you're already required to do by law, such as compensatory plantation conditions attached to an environmental clearance.

Tree gifts for clients or staff are a separate matter, and your finance team should decide how to treat them (see corporate tree gifting).

Choosing a CSR-1 Registered Implementing Agency

You can run CSR projects yourself, with other companies, or through an implementing agency. For an independent NGO, Rule 4(1) requires it to be:

a Section 8 company, registered public trust or registered society;
registered under Section 12A and approved under Section 80G of the Income-tax Act;
able to show an established track record of at least three years in similar activities; and
registered with MCA through Form CSR-1. Since 1 April 2021, every implementing agency has to register on the MCA21 portal before it can take on CSR projects, and it receives a CSR registration number.

Before you sign, ask for: the CSR-1 number, 12A and 80G approvals, registration documents, NGO Darpan ID, audited accounts and past project examples.

Ongoing Projects and Unspent Amounts

Plantation needs aftercare, so many companies set it up as an ongoing project. MCA defines this as a multi-year project lasting up to three financial years, not counting the year it starts (the "1+3" rule). It can't be extended beyond that.

The rules for money not spent by the end of the financial year are strict:

Ongoing projects: move the unspent amount into an "Unspent CSR Account" at a scheduled bank within 30 days of the year end, and spend it within the next three financial years. Anything still unspent after that goes to a Schedule VII fund within 30 days.
Other unspent amounts: transfer them to a Schedule VII fund (such as the PM National Relief Fund) within six months of the year end.
Penalty: for a company, twice the amount that should have been transferred or ₹1 crore, whichever is less. For each officer in default, one-tenth of that amount or ₹2 lakh, whichever is less.

Money paid to an implementing agency only counts as "spent" once the agency uses it. Under Rule 4(5), the Board must be satisfied that funds were used as approved, and the CFO must certify this. Link payments to plantation milestones.

Overheads and Excess Spending

Administrative overheads can't be more than 5% of your total CSR spend for the year. Direct project costs such as saplings, site preparation, planting labour and watering are not overheads.
Spending more than your obligation: you can set off the excess against your CSR requirement for up to three following financial years, subject to the conditions in Rule 7(3), including a Board resolution.

Impact Assessment

Under Rule 8(3), a company whose average CSR obligation was ₹10 crore or more over the three immediately preceding financial years must get an independent agency to carry out an impact assessment of every CSR project that:

had an outlay of ₹1 crore or more, and
was completed at least one year before the study.

The report goes to the Board and is annexed to the annual report on CSR. Its cost can be booked as CSR spend, up to 5% of that year's CSR spend or ₹50 lakh, whichever is less, on top of the 5% overhead limit.

For plantation, the best evidence is survival counts, geo-tagged photos and site maps.

Board, CSR Committee and Reporting

A CSR Committee is required, but if your CSR obligation is ₹50 lakh or less, the Board can carry out its functions instead.
The Board approves an annual action plan listing each project, its Schedule VII item, budget, timelines and monitoring.
The Board's Report includes an annual report on CSR in the format set out in the CSR Rules.

Compliance Checklist for a CSR Plantation Project

Plantation is listed under Schedule VII item (iv) in your CSR policy and annual action plan
The implementing agency has CSR-1, 12A and 80G, and a three-year track record
The project is open to the public, not only your employees, and isn't a marketing event
Ongoing-project timelines fit within the 1+3 years
Payments are made in stages, with utilisation and CFO certification
Unspent amounts are transferred to the Unspent CSR Account within 30 days
Geo-tagged records, photos and survival data are kept for reporting and impact assessment

How Earthxway Foundation Works With Companies

Earthxway Foundation is a Section 8 non-profit, established in 2020, registered on NGO Darpan, with 12A, 80G and CSR-1 certifications. We've planted more than 55,700 trees in Maharashtra with schools, societies and volunteers. "CSR Ready" projects on our projects page include the Green School Certification Program (Pune and Gondia) and the Vidarbha Farmer Support Program. See our sites on the Impact Map, talk to us through CSR Partnerships, or read our CSR & ESG guide for BRSR reporting.

Please note: this guide is general information, based on the Companies Act, 2013, the Companies (CSR Policy) Rules, 2014 as amended, and MCA's CSR FAQs, as of 23 October 2026. It isn't legal advice. Please check with your company secretary or legal adviser before you finalise your CSR plan. The full text of Schedule VII and the CSR Rules is on India Code and the National CSR Portal.

Frequently Asked Questions

Is tree plantation allowed under CSR in India?

Yes. Tree plantation falls under Schedule VII item (iv) of the Companies Act, 2013, which covers environmental sustainability, ecological balance, protection of flora and fauna, agroforestry and conservation of natural resources.

Does a CSR plantation partner need CSR-1 registration?

Yes. Since 1 April 2021, every implementing agency that carries out CSR projects for a company must be registered with the Ministry of Corporate Affairs through Form CSR-1. Companies that run projects themselves don't need it.

Can a company plant trees on its own campus and count it as CSR?

Generally not. Activities that benefit only the company's employees are excluded from CSR. A project must benefit the public; employees taking part along the way is fine.

Is an impact assessment mandatory for CSR plantation?

Only for companies with an average CSR obligation of ₹10 crore or more in the three preceding financial years, and only for projects of ₹1 crore or more completed at least one year before the study. It must be done by an independent agency.

What happens to unspent CSR money on a plantation project?

If the plantation is an ongoing project, the unspent amount goes into an Unspent CSR Account within 30 days of the year end and must be spent within three financial years. Other unspent amounts go to a Schedule VII fund within six months.

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CSR Tree Plantation under Schedule VII: A Guide for Companies