New Delhi, May 30 -- In a significant move, the government has allowed companies to invest up to 10 per cent of their CSR funds in zero coupon zero principal instruments issued by not for profit organisations through a social stock exchange.

Under the Companies Act, 2013, a certain class of profitable companies are required to shell out at least two per cent of their three-year average annual net profit towards CSR (Corporate Social Responsibility) activities in a particular financial year.

The corporate affairs ministry has introduced the item 'subscription to zero coupon zero principal instruments on Social Stock Exchange' in Schedule VII, which pertains to activities allowed for CSR activities under the Companies Act.

"This amendmen...