A single sentence with a threshold and two obligations: where the total income of a registered non-profit organisation, computed without giving effect to this Part, exceeds the maximum amount not chargeable to income-tax in a tax year, its accounts for that year must be audited by an accountant, and the person in receipt of the income must furnish an audit report of that income by the prescribed date, in the prescribed form, signed and verified by the accountant and setting out the prescribed particulars.
Why it is there
The exemptions given to a registered non-profit organisation depend on how its income is applied, so once its pre-exemption income crosses the basic threshold the Act requires independent verification of the accounts before the benefit is taken.
Who it applies to
A registered non-profit organisation
The person in receipt of the income (who must furnish the audit report)
An accountant conducting the audit
The figures, and what each one turns on
Read the condition in the same row. A figure quoted without it is a wrong answer with a citation attached.
What
Figure
The condition on it
Where
Threshold at which audit becomes compulsory
The maximum amount which is not chargeable to income-tax
Total income computed without giving effect to the provisions of this Part must exceed it in the tax year; the section itself states no rupee amount
S.348
Date, form and particulars of the audit report
As prescribed
The report must be signed and verified by the accountant
S.348
What this means in practice
Test the threshold on income computed before the exemptions in this Part, not on the exempt figure — an organisation whose income is fully applied and therefore not taxable can still be over the line and required to audit. The report has to be furnished by the prescribed date in the prescribed form, so the deadline and format come from the rules rather than from this section. The obligation to furnish falls on the person in receipt of the income, while the audit itself must be done by an accountant.
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 applies the whole of its receipts and ends the year with nothing chargeable to tax. That does not answer this section: the threshold is tested on total income computed without giving effect to the provisions of this Part, so if that pre-exemption figure is, say, Rs. 9,00,000 and it exceeds the maximum amount not chargeable to income-tax — a figure this section does not state — the accounts must be audited by an accountant even though the taxable income is nil. The audit alone is not enough either: the person in receipt of the income must also furnish the report by the prescribed date, in the prescribed form, signed and verified by the accountant and setting out the prescribed particulars.
Where you meet this section
In the audit report the organisation has to furnish alongside its return — the date, the form and the particulars all come from the rules rather than from this section. The audit must be done by an accountant, while the duty to furnish the report falls on the person in receipt of the income.
The words themselves
Where the total income of a registered non-profit organisation, without giving effect to the provisions of this Part, exceeds the maximum amount which is not chargeable to income-tax in any tax year, the accounts of such registered non-profit organisation for that tax year shall be audited by an accountant
s.348, Income-tax Act, 2025.
What people get wrong
Testing the threshold after applying the Part's exemptions. The section says 'without giving effect to the provisions of this Part'.
Looking for the rupee threshold here. The section refers to the maximum amount not chargeable to income-tax, which is fixed elsewhere, and gives no figure of its own.
Assuming the audit alone discharges the obligation. The report must also be furnished by the prescribed date in the prescribed form with the prescribed particulars.
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.
12A - Conditions for applicability of sections 11 and 12
Rules of the Income-tax Rules, 2026 that work section 348. Where the rule’s own heading names the section we say so; the rest are marked on reading the rule, which is our derivation and not the department’s. A rule that serves the section silently and that we have missed will not appear here.
Rule 188 — Report of audit in case of registered non-profit organisations under section 348
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.
Circular No. 689 — Section 143(1)( a) l Prima Facie Adjustments 1994-08-24
Circular No. 143 — 172. Audit report in Form No. 10B in terms of rule 17B - Auditor can accept as a correct list of specified persons as given by man 1974-08-20
Circular No. 115 — Section 12A l Conditions as to Registration of Trusts 1973-06-30
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.
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 348. 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.
ACIT v Ahmedabad Urban Development AuthoritySupreme CourtCuts both waystagged s.12A We charge fees for our public utility work. Does that cost us charitable status under s.2(15)?
ACIT v Saurashtra Kutch Stock Exchange LtdSupreme CourtHelps taxpayertagged s.12A A binding decision that covers my point was never considered when my order was passed. Is that a mistake apparent from the record?
Ananda Social and Educational Trust v CITSupreme CourtHelps taxpayertagged s.12A Our trust was formed weeks ago and has done nothing yet. Can registration be refused for that?
CIT (Exemptions) v Shree Sai Baba Sansthan TrustHigh CourtHelps taxpayertagged s.12A Our trust is religious and charitable and holds 80G approval. Can the officer tax our hundi collections under s.115BBC?
Chotanagpur Diocesan Trust v Union of IndiaHigh CourtHelps taxpayertagged s.12A My 148A(b) notice describes an enquiry but nothing was attached. Can I insist on the material?
Trust for Reaching the Unreached v CITHigh CourtHelps taxpayertagged s.12A Our audit report was not e-filed with the return and exemption was denied. Can the delay be condoned?
Hemkunt Foundations v PCITITATHelps taxpayertagged s.12A The pcit cancelled our 12A registration after a survey. Was he even allowed to do that?
South India Club v ITOITATCuts both waystagged s.12A CPC denied my trust's section 11 exemption in a section 143(1) intimation for a late Form 10B, and a regular assessment has since been completed and…
Versova Kokni Sunni Jamat Trust v CPCITATHelps taxpayertagged s.12A We have no 12A registration. Is a corpus donation given for buying property taxable in our hands?
CBDT Circular 16/2024CBDTHelps taxpayertagged s.12A(b) Our Form 10B is years late. Who can condone the delay, and how long do I have to apply?
CBDT Circular 7/2024CBDTHelps taxpayertagged s.12A Our Form 10AB was rejected for late filing. Does the CBDT let us apply again?
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.
