Part 2 of 15
As we saw yesterday, the income tax provisions for charitable institutions have been structured in 7 neatly organised sub parts in Income Tax Act 2025. Let us do sub part 1 today. This sub part is regarding Registration of charitable institution for income tax exemption. But before that let us see some definitions
Please note that if you are registered as an exempt entity under income tax you will be called as ‘Registered Non Profit Organization (RNPO)’ from 1.4.2026. The Income Tax Act will call you as RNPO only always henceforth. Remember this acronym. But what is a Registered Non Profit Organization (RNPO)?
The Act defines “Registered non-profit organization” as any person having a valid registration under any specified provision and such registration has not been cancelled
So, if you are person with valid registration under any specified provisions of Income Tax Act 1961 or 2025 and it has not been cancelled, your organisation is an RNPO. If the NGO has valid registration no action is required at this stage.
Two more definitions
“Charitable Purpose” Section 2(23) of Income Tax Act defines it to include–
- Relief of the poor;
- education;
- yoga;
- medical relief;
- preservation of environment (including watersheds, forests and wildlife);
- preservation of monuments or places or objects of artistic or historic interest;
- the advancement of any other object of general public utility;
The proviso to limb g above has been removed whereas the definition is same as Section 2(15) of Income Tax Act 1961. Religious purpose has not been defined as was in ITA 1961
Tax Year means twelve months period of the financial year commencing on 1st April of such financial year
The Department has done away with Previous Year (PY) and Assessment Year (AY) completely from 1.4.2026 which used to confuse us so much.
Now let us do sub part 1 of Chapter XVII-B which deals with Registration
Registration (Sections 332-333) of Income Tax Act 2025
Section 332-Application for Registration- following persons (called registered non-profit organization) for claiming benefits under this Part, make an application for registration to P/CIT-
a. a public trust;
b. a society registered under the Societies Registration Act, 1860, or under any law in force
c. a company registered under section 8/25 of the Companies Act, 2013/1956
d. a University/ educational institution affiliated thereto or recognized by Govt
e. an institution financed wholly/partly by Government/local authority;
f. any person as referred to in
Schedule III-Income not to be included in total income of eligible persons (Table: Sl. No. 27) to (Table: Sl. No. 29) i.e. contribution to IPF setup by SE, CE and Depository and (Table: Sl. No. 36) i.e. section 10(46) i.e. entities created by central/state govt and notified by central govt for benefit of general public other than Sch VII Table sl 42 and
Schedule VII Persons exempt from Tax (Table: Sl. No. 10-16) PMNRF, PMCARES, SBM ,Clean Ganga, CM Relief Fund etc-deleted in Budget 2026, Table Sl 17-any University/edu institution substantially/wholly financed by Govt, Table Sl 18- any medical institution wholly/substantially financed by Govt and Table, Sl 19-any educational or medical institution with gross receipts upto Rs. 5 cr.PA, Table: Sl. No. 42-any body/authority setup by Central/State Act for housing, development of cities, village, regulating activity for benefit of general public; or
g. any other person notified by CBDT
Below are types of registration/approval for RNPO under ITA 2025
Table- 332-cases, time limit for application, approval by Dept and validity of registration
| Sl. No. | Case | Time limit for furnishing application | Time limit for passing order | Validity of registration |
|---|---|---|---|---|
| 1 | Where the activities of the applicant have not commenced and it has not been registered under any specified provision at any time before making the application. | At any time during the tax year beginning from which registration is sought. | One month from the end of the month in which application is made. | Three tax years commencing from the tax year in which such application is made. |
| 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. | At any time during the tax year, beginning from which registration is sought. | Six months from the end of the quarter in which application is made. | Five tax years commencing from the tax year in which such application is made. |
| 3 | Where the applicant has been granted provisional registration and activities have commenced. | Within six months of the commencement of activities. | Six months from the end of the quarter in which application is made. | Five tax years commencing from the tax year in which such application is made. |
| 4 | Where the provisional registration of the applicant is due to expire and activities have not commenced. | At least six months prior to the expiry of the provisional registration. | Six months from the end of the quarter in which application is made. | Five tax years following the tax year in which such application is made. |
| 5 | Where the registration of the applicant is due to expire, other than cases mentioned at serial number 4. | At least six months prior to the expiry of the registration. | Six months from the end of the quarter in which application is made. | Five tax years following the tax year in which such application is made. |
| 6 | Where the registration of the applicant has become inoperative due to switching over of regime under Section 333 | At any time during the tax year beginning from which the registration is sought to be made operative. | Six months from the end of the quarter in which application is made. | Five tax years commencing from the tax year in which such application is made. |
| 7 | Where the applicant, being a registered NPO has adopted or undertaken modification of its objects which do not conform to the conditions of registration. | Within thirty days of the date of such adoption or modification | Six months from the end of the quarter in which application is made. | Five tax years commencing from commencement of the tax year in which such application is made. |
So, all possible cases of registration/approval/renewal etc will fall in one or the other serial no in above table.
Conditions for registration
- Person must be constituted/registered/incorporated for charitable purpose under (2(23) or public religious purposes
- Properties held under an irrevocable trust for benefit of public wholly for charitable/religious purpose
- Condonation for delay in filing registration application by P/CIT with reasonable cause for delay in registration application
- Accreted tax if condonation is not granted in cases for Table sl. No 3,4,5,7 (3. conversion of provisional regn, 4. renewal of provisional 5. renewal of regular regn and 7. modification of objects)
- If income in past 2 tax years prior to application is upto Rs. 5 cr, registration granted for 10 years-applicable to cases in Table sl. 3 to 7
- For cases in Table sl. No. 2-7, P/CIT see gaminess and compliance with other laws and grant/reject registration (after giving opportunity of being heard in case of rejection)
- Provisional registration granted by P/CIT only
The above are provisions relating to Registration of RNPO. Please raise your queries on today’s post on Forum.
Tommorow, we will understand the provisions of sub part 2 of Chapter VII-B i.e. Income of RNPO.
See you tomorrow.
CS Sharad Bhargava