Tax on income of registered non-profit organisation
[Section-334 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 334(1) of Income Tax Act 2025
334(1) The Income-tax payable by a registered non-profit organisation on its total income for any tax year shall be the aggregate of the amounts calculated––
- (a) at the rate of 30% on specified income for such tax year; and
- (b) at the rate applicable on taxable regular income and any residual income for such tax year under other provisions of this Act.
Section 334(2) of Income Tax Act 2025
334(2) The provisions of this Chapter shall apply irrespective of anything to the contrary contained in any other provision of this Act other than section 96 to 98.
FAQs on Section 334 of Income Tax Act 2025
What is the rate of tax applicable to a registered non-profit organisation under the Income Tax Act, 2025?
A registered non-profit organisation is liable to pay income-tax at 30% on its specified income and at the applicable rates under other provisions of the Act on its taxable regular income and any residual income.
What constitutes the total income of a registered non-profit organisation for tax purposes?
Total income includes specified income, taxable regular income, and residual income of the organisation for the relevant tax year.
What is ‘specified income’ for a registered non-profit organisation?
Specified income refers to the portion of income defined by the Act that is subject to tax at a flat rate of 30%. The detailed definition of ‘specified income’ is laid out in other provisions or notifications under the Act.
How is the tax computed on regular and residual income of a registered non-profit organisation?
Tax on regular and residual income is computed at rates applicable under other provisions of the Income Tax Act, 2025, depending on the nature and category of such income.
Are registered non-profit organisations exempt from tax under any circumstances?
Only certain income components may be exempt if they qualify under other specific sections of the Act. Otherwise, tax is levied as per Section 334(1).
Can a registered non-profit organisation claim exemption under provisions contrary to Chapter XXX of the Act?
No, as per Section 334(2), the provisions of this Chapter shall apply regardless of any contrary provisions in the rest of the Act, except for those contained in Sections 96 to 98.
Do Sections 96 to 98 override the provisions of Section 334?
Yes, Section 334(2) explicitly states that Sections 96 to 98 take precedence over the provisions of Chapter XXX, including Section 334.
Is the tax rate fixed at 30% for all income of non-profit organisations?
No, the 30% rate is only for specified income. Other income such as taxable regular income and residual income is taxed at rates applicable under other provisions of the Act.
From when are the provisions of Section 334 applicable?
These provisions are applicable from 1st April, 2026, for the tax year starting on or after that date.
Does registration as a non-profit automatically qualify an organisation for special tax treatment?
No, registration is a prerequisite, but tax treatment is governed specifically by the provisions of Section 334 and the nature of the income involved.
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