<h1>Companies Act Section 135: Firms must allocate 2% of profits to CSR if meeting certain financial thresholds.</h1> Section 135 of the Companies Act, 2013 mandates that companies with a net worth of 500 crore rupees or more, a turnover of 1,000 crore rupees or more, or a net profit of 5 crore rupees or more must allocate at least 2% of their average net profits from the past three years to Corporate Social Responsibility (CSR) activities. If the specified amount is not spent, the reasons must be disclosed in the Board's Report. The CSR activities are outlined in Schedule VII of the Act. These provisions were notified on February 27, 2014, and took effect on April 1, 2014.