Section 349 of the Income-tax Act, 2025 — Return of Income of a Registered Non-Profit Organisation (NPO / Charitable Trust)

In plain language

What Section 349 says in plain English

Section 349 of the Income-tax Act, 2025 is the return-filing provision for a registered non-profit organisation (RNPO) — the new law's name for what most people still call a charitable trust, religious trust, society, Section 8 company or NGO. It carries forward the rule earlier found in Section 139(4A) of the Income-tax Act, 1961, and sits inside the consolidated charitable-trust code (Part B of Chapter XVII, Sections 332 to 355) of the 2025 Act.

The core command is simple: if a registered NPO's total income — computed before giving effect to the exemptions in this Part — exceeds the maximum amount not chargeable to tax (the basic exemption limit), the NPO must file a return of income for that tax year. It files under the machinery of Section 263(1)(a)(iii) read with Section 263(2), within the due date in Section 263(1)(c).

Why the words "before giving effect to the provisions of this Part" matter

• You test income gross, not net. You must first ask: does my gross income (donations, grants, property income, interest, fees, etc.) exceed the basic exemption limit, ignoring the exemptions the trust would otherwise enjoy?
• If yes, you must file — even if your final taxable income after exemption is nil. A trust that applies 100% of its income to charity and pays zero tax still has to file, because the test is applied on the pre-exemption figure.
• This closes the loophole of a fully-exempt trust staying invisible. The 2025 Act's philosophy is: exemption does not mean the trust can skip filing.

Who this applies to

• Trusts and institutions registered under Section 332 of the 2025 Act (the successor to Section 12AB / 12A registration).
• Charitable and religious trusts, societies, Section 8 companies, universities, hospitals, and research/scientific bodies that claim exemption under Sections 335, 336 and 337 (the new equivalents of old Sections 11, 12 and 10(23C)).
• It does not apply to bodies whose pre-exemption income is below the basic exemption limit — for them filing under Section 349 is not compulsory (though voluntary filing is usually advisable).

Filing a return is a condition for keeping your exemption

This is the single most important practical point. Under the 2025 code, the exemption benefits available to an NPO are linked to compliance. Filing the return within the permitted time under Section 349 (read with Section 263) is a precondition to claiming the income-application and accumulation exemptions under Sections 335/336/337. Miss the filing window and the trust can lose the exemption for that year and be taxed at maximum marginal rate on income that would otherwise have been exempt.

Due dates and the belated-return relief (Finance Bill 2026)

• Original return: due date under Section 263(1)(c). For an NPO whose accounts are subject to audit (the usual case), this is 31 October of the assessment year; for non-audit cases the general due date (around 15 September) applies.
• Belated return: As originally enacted, Section 349 pointed only to the original due-date clause, which raised fears that a late-filing trust could permanently lose its exemption. The Finance Bill/Act 2026 amended Section 349 (Clause 67) to insert a cross-reference to Section 263(4), expressly allowing an NPO to file a belated return up to 31 December of the assessment year. This restores the flexibility that existed under the 1961 Act.
• This amendment takes effect from 1 April 2026 and applies to tax year 2026-27 and onwards.

How it interacts with the rest of the NPO code

• Section 332 — registration of the NPO (the gateway to the whole regime).
• Section 347 — maintenance of prescribed books of account.
• Section 348 — compulsory audit and furnishing of the audit report before the due date where income exceeds the exemption limit.
• Section 342 / Form 10 (accumulation) — where a trust wants to accumulate income beyond the 15% permitted, it files the accumulation statement before the return due date; the return under Section 349 then reports that accumulation.

The form and mode

Registered NPOs file electronically, and in practice continue to use Form ITR-7. Filing must be verified (digital signature or EVC as applicable). The return must reconcile with the audit report and the books maintained under Sections 347–348.