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Case law › Income-tax Act 2025 › Chapter XVII › Section 340
Chapter XVIIwas s.11

Section 340 of the Income-tax Act, 2025

Section 340 — Deemed corpus donation. Successor to s.11 of the 1961 Act.

Where this section sits

Section 340 is in Chapter XVII — Special Provisions Relating to Certain Persons, which runs from section 302 to section 355.

← Section 339  ·  Section 341 →

What this section does

The section applies where the property of a registered non-profit organisation includes a temple, mosque, gurudwara, church or other place notified under section 133(1)(b)(vi). Any sum or sums received by the organisation as a donation for the purpose of renovation or repair of that place may, at the organisation's option, be deemed to form part of the corpus under section 339, if it satisfies four conditions: it maintains the corpus as separately identifiable; it applies the corpus only for the purpose for which the donation was made; it invests or deposits the corpus in one of the modes permitted under section 350; and it does not apply the corpus for making a donation to any person.

Why it is there

A donation given for repairs is not naturally a corpus donation, because the donor directs it to a purpose rather than directing that it be held as corpus. The section supplies the option to treat it as corpus anyway, and pays for that by four conditions that keep the money identifiable, tied to the purpose the donor named, held in permitted investments, and out of the onward-donation route.

Who it applies to

What this means in practice

The treatment is elective, not automatic — the words are "may, at its option, be deemed". All four conditions attach at once and each is continuing rather than a formality at the time of receipt: the fund must stay separately identifiable, stay in a section 350 mode, and be spent only on the purpose the donor named. The gateway is the notification: it is a place notified under section 133(1)(b)(vi) — that is, notified by the Central Government to be of historic, archaeological or artistic importance or a place of public worship of renown throughout any State or States — and not simply any place of worship the organisation owns. Clause (d) then blocks the most obvious leak by barring the corpus from being applied to make a donation to any person, however worthy.

An example

Illustrative only, and invented for this page. The figures are chosen to show the rule biting, not taken from any real matter.

A registered non-profit organisation whose property includes a temple notified under section 133(1)(b)(vi) receives 2 crore rupees earmarked by donors for repairing it. If it keeps that 2 crore separately identifiable, invests or deposits it only in a mode permitted under section 350, spends it only on that repair, and makes no donation out of it, it may elect to treat the 2 crore as forming part of its corpus under section 339. Spending part of it on unrelated activity breaks clause (b), and passing any of it on as a donation to another organisation breaks clause (d).

Where you meet this section

In the organisation's own accounts and return, where the receipt is shown as corpus, and in an assessment where the Assessing Officer tests whether the four conditions were met before the deeming was claimed.

The words themselves

may, at its option, be deemed as forming part of the corpus under section 339
Section 340, Income-tax Act, 2025.
does not apply such corpus for making donation to any person
Section 340(d), Income-tax Act, 2025.

What people get wrong

What this replaced

The correspondence is the Income Tax Department’s own, from its comparison utility for the 1961 and 2025 Acts. A renumbering is the easy half; whether the words changed is the half that decides cases.

See the full 1961 to 2025 concordance.

Circulars of the Board on this section

A circular binds the department, not you and not a court. Every one below was written under the 1961 Act; it reaches this section because the department’s own concordance carries the provision it names to this one.

See every circular and notification on this section, or the circulars index.

Notifications that reach this section

A notification is made under a power the Act gives and, within that power, is law. These too were made under the 1961 Act and are placed here by the department’s concordance. We hold 697 in all; the 250 most recent are listed.

See every circular and notification on this section, or the notifications index.

Case law carried across

Read this before you rely on it. Every decision below was decided under the Income-tax Act, 1961. It appears here because it is tagged to a 1961 provision that the department’s own mapping carries to section 340. That is an inference we have drawn, not a holding on the new section: where the words changed in the move, the reasoning may not survive. Treat this as the place to start looking, not as authority on the 2025 Act.

Explainers

Read with

What this page does not tell you. It does not reproduce the section. Everything above was written from the section’s own text as the Income Tax Department publishes it — the text is here, and nothing here is advice on your facts. Where a figure matters, read the sub-section it comes from.