Registration Of Non-Profit Organisation (NGO) Under New Income Tax Bill

Under the Income Tax Act 1961 sections relating to Charitable Trust are distributed under different chapters and sections. Under the New Income Tax Bill. 2025 only one chapter XVII-B (17B), will find from section 332 to 355 that is only under 24 sections. The title of this chapter is Special Provisions for Registered Non-Profit Organization. Now we have to look in to chapter XVII-B only, instead of Chapters 1, 3, 6B, 12, 12EB etc. under old act. But for definition will have to refer chapter 1 section 2(23) definition. Under section 332 Non-Profit Organization have been given legal form, under which N.P.O. has been registered.

Registered NPO has been defined under clause 355(g) of bill as under:

“Registered Non-Profit Organization” means any person having a valid registration under any specified provision and such registration has not been cancelled.

Special provisions for registered non-profit organization are as under:

Under Income Tax Act, 1961 Proviso, Explanation are

given, sometime it is difficult to understand, while in Bill everything is given in Tabular Form, so it better to understand.

For registration under clause 332(3) tabular form is given:

Registration of NPO:

Any persons may, for claiming a benefit as a registered non-profit organization make an application for registration in such form and manner as prescribed, to the Principal Commissioner or Commissioner. A person may be, a public trust, a registered society, a registered company, a university, an institution financed by the Government or local authority or any other person notified by the Board.

A person referred above shall be eligible for registration, if-

(a) such person is constituted or registered or incorporated in India for carrying out one or more charitable purposes as referred to in section 2(23) or one or more public religious purposes, or both; and

(b)  the properties of such person are  held under an irrevocable trust for the benefit of general public, wholly for charitable or religious purposes, or partly for charitable or religious purposes in India, if such person was constituted or registered or incorporated prior to the commencement of the Income Tax Act, 1961.

Every application in respect of the cases

(1) Where the activities of the applicant have not commenced and it has not been registered any specified provision at any time before making the application.

(2) Where the activities of the applicant have commenced and it has not been registered under any specified provision at any time before making the application.

(3) Where the applicant has been granted provisional and activities have commenced.

(4) Where the provisional registration of the applicant is due to expire and activities have not commenced.

(5) Where the registration of the applicant is due to expire, other than cases mentioned at serial no (4) above.

(6) Where the registration of the applicant has become inoperative due to switching over of regime under section 333.

(7) Where the applicant being a registered non-profit organization, has adopted or undertaken modification of its objects.

(8) If the application is made beyond the time allowed, the Principal Commissioner or Commissioner may, if he considers that there is a reasonable cause for delay in furnishing the application, condone delay and such application shall be deemed to have been made within time.

(9) In the case of an application is made and total income of such applicant, does not exceed five crore rupees each of the two tax years, preceding the tax year, shall have effect as if for the words five years, the words ten years had been substituted.

(10) The Principal Chief Commissioner or Commissioner shall, on application made by the applicant about the objects and the genuineness of the activities and compliance of requirements of any other law in force, call for such documents or information or make such inquiries as he think necessary in order to satisfy himself, shall pass an order granting registration; or if he is not satisfied, after affording a reasonable opportunity of being heard to the applicant shall pass an order rejecting the application or pass an order in writing rejecting the application and also cancelling the registration.

(11) Under certain circumstances Principal Commissioner or Commissioner shall grant provisional registration.

(12) Where the registration of person, registered prior to the 1^st April, 2021 under the specified provision of the Income Tax Act, 1961 has expired and such person makes an application for registration under this part, the Principal Commissioner or Commissioner may, he may considered that there is a reasonable cause for delay in making such application, condone such delay and grant registration to such person, which shall be valid for five years from the commencement of the year 2021-2022