Rule 184 — Exercise of options by a registered non-profit organisation under section 341(7) for deemed application under section 341(5). Made under s.341, s.263 of the Income-tax Act, 2025.
Rule 184 gives effect to Section 341 and Section 263 of the Income-tax Act, 2025. A rule cannot go beyond the section it serves: where the two seem to differ, the section governs.
The rule prescribes how a registered non-profit organisation exercises the option under section 341(7) for deemed application under section 341(5).
Sub-rule (1) requires the option for any tax year to be exercised in Form No. 108, on or before the due date specified under section 263(1) for furnishing the return of income. Sub-rule (2) requires the option in Form No. 108 to be furnished electronically, either under digital signature or electronic verification code.
Section 341(7) gives the organisation a choice whose effect is to treat an amount as applied under section 341(5) in a year in which it was not in fact applied. A choice with that effect has to be made before the year's position is settled and has to be traceable to the organisation, which is why the rule fixes both a form and a deadline tied to the return due date, and requires authenticated electronic filing rather than a paper claim.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Time to exercise the option | On or before the due date specified under section 263(1) for furnishing the return of income | For the tax year for which the option is exercised | Sub-rule (1) |
The option is exercised by furnishing Form No. 108, not by any statement in the accounts or the return, and it is a year-by-year step: sub-rule (1) speaks of the option for any tax year, exercised by that year's return due date. The deadline is the section 263(1) due date for furnishing the return, so it can fall before the return is actually filed and a late return does not extend it. Sub-rule (2) leaves only two acceptable modes of authentication — digital signature or electronic verification code — and both are electronic, so a signed paper form does not satisfy the rule. What the option achieves, and the conditions on the deemed application, are in section 341(5) and (7); the rule settles only how and when the option is made.
A registered non-profit organisation receives a large donation late in the tax year that it cannot spend before the year ends, and wants the amount treated as applied under section 341(5). It must furnish Form No. 108 electronically, under digital signature or electronic verification code, on or before the section 263(1) due date for that year's return. Filing the return on time with the amount claimed as deemed application, but without Form No. 108, does not exercise the option.
The organisation meets it once a year, in Form No. 108 filed on the income-tax portal before the return due date, and again in any proceeding where the deemed application under section 341(5) is examined.
The option to be exercised in accordance with provisions of section 341(7) for any tax year shall be exercised in Form No. 108 on or before the due date specified under section 263(1) for furnishing the return of income.
The option in Form No. 108 shall be furnished electronically, either under digital signature or electronic verification code.