Specified income
[Section-337 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
The specified income of a registered non-profit organisation shall mean the income as specified in column B of the Table below and shall be taxable in the year provided in the column C thereof:––
Table
| Specified income | Tax year |
|---|---|
| 1. Any anonymous donation received by a registered non-profit organisation (other than a registered non-profit organisation created or established wholly for religious purposes) excluding the anonymous donations up to ₹1,00,000 or 5% of the such donations received by it during the tax year, whichever is higher. | Tax year in which such anonymous donation is received. |
| 2. Any portion of income applied by it, directly or indirectly, for the benefit of any related person, computed in the manner, as prescribed. | Tax year in which such application is made |
| 3. Any portion of income applied by it outside India in contravention to the provisions of section 338(a). | Tax year in which such application of income is made. |
| 4. Any investment made in contravention to the provisions of section 350 out of any income, accumulated income, deemed accumulated income, corpus, deemed corpus, or any other fund. | Tax year in which such investment is made. |
| 5. Any deemed corpus donation in respect of which any of the conditions specified in the section 340 is violated. | Tax year in which such violation is made. |
| 6. Any portion of accumulated income, if it is applied to purposes other than charitable or religious purposes for which it is accumulated or set apart. | Tax year in which it is so applied. |
| 7. Any portion of accumulated income, if it ceases to be accumulated or set apart for application to such purposes as specified under section 342(1). | Tax year in which it ceases to be so accumulated or set apart. |
| 8. Any portion of accumulated income, if it is not utilised for the purpose, for which it is accumulated or set apart within the period for which it was accumulated or set apart as specified in section 342(1). | Last of the tax years for which income was so accumulated or set apart. |
| 9. Any portion of accumulated income, if it is credited or paid to any other registered non-profit organisation. | Tax year in which it is so credited or paid. |
| 10. Any income applied to purposes other than charitable or religious purposes for which it is registered. | Tax year in which it is so applied. |
| 11. Any income determined by the Assessing Officer under section 344 in excess of income shown in the books of account of such business undertaking. | Tax year to which such income relates. |
FAQs on Section 337 of Income Tax Act 2025
What is meant by “specified income” under Section 337?
Specified income refers to certain types of income received or applied by a registered non-profit organisation that are deemed taxable under the conditions laid down in Section 337.
Is anonymous donation always considered taxable under specified income?
No. Anonymous donations are not taxable up to ₹1,00,000 or 5% of the total anonymous donations received during the tax year, whichever is higher.
When is the anonymous donation taxable for a registered non-profit organisation?
It is taxable in the tax year in which such anonymous donation is received, excluding the exempt portion.
Are anonymous donations to religious non-profits also taxable under this section?
No. Section 337 excludes registered non-profits created or established wholly for religious purposes from taxation on anonymous donations.
What happens if a registered non-profit applies income for the benefit of a related person?
Such income is treated as specified income and becomes taxable in the year of such application.
How is “benefit to a related person” determined?
It is computed in the manner as prescribed under the Act, and involves direct or indirect application of income for any related person.
Is income applied outside India by a non-profit taxable?
Yes, if it is in contravention of section 338(a), such application becomes taxable in the year of application.
What is the consequence of making an investment that violates Section 350?
Any such investment made out of any income, accumulated income, corpus or deemed corpus is treated as specified income and taxed in the year it is made.
What happens if the conditions for deemed corpus donation under Section 340 are violated?
Such income is treated as specified income and taxed in the year the violation occurs.
Is the use of accumulated income for purposes other than intended charitable or religious purposes taxable?
Yes, it becomes specified income and is taxed in the year of such application.
What if the accumulated income ceases to be set apart for the intended purposes?
It is treated as specified income and taxed in the year it ceases to be accumulated or set apart.
Is there a time limit within which the accumulated income must be used?
Yes. If it is not used within the period for which it was accumulated as per Section 342(1), it becomes specified income and is taxed in the last tax year of that period.
Can a non-profit credit or pay its accumulated income to another non-profit?
Yes, but if it does so, the amount credited or paid becomes specified income and is taxable in the year of such transfer.
Is there a restriction on applying income for non-charitable or non-religious purposes?
Yes. Any such application of income for purposes other than for which the non-profit is registered results in taxable specified income for that year.
What happens if the Assessing Officer finds more income than what is recorded in the books?
The excess income determined under Section 344 is treated as specified income and taxed in the tax year to which it relates.
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