Rule 187 — Books of account and other documents to be kept and maintained by a registered non-profit organisation. Made under s.347 of the Income-tax Act, 2025.
Rule 187 gives effect to Section 347 of the Income-tax Act, 2025. A rule cannot go beyond the section it serves: where the two seem to differ, the section governs.
Sub-rule (1) lists what a registered non-profit organisation required to keep books of account and other documents under section 347 must keep and maintain.
Clause (a) is the books of account themselves: cashbook, ledger, journal, copies of bills issued by the assessee whether machine numbered or otherwise serially numbered and copies or counterfoils of receipts issued, original bills issued to the person and receipts for payments made by it, and any other book required to give a true and fair view of the state of affairs and to explain the transactions effected. Clause (b) requires the same books for a business undertaking referred to in section 344, and clause (c) requires them for any business carried on other than that undertaking.
Clause (d) is the list of other documents. Sub-clause (i) is a record of all projects and institutions run by the person with their name, address and objectives. Sub-clause (ii) is a record of income of the tax year in respect of charitable or religious activity for which it is registered, any property, deposit or investment held, voluntary contributions received, any commercial activity permissible under sections 344, 345 and 346, specified income as referred to in section 337, and residual income as referred to in section 355(j).
Sub-clause (iii) is a record of what is done with the income of the tax year: application of income in India with the amount, the name and address of the person credited or paid and the object; amounts credited or paid to any registered non-profit organisation with their name, address, permanent account number and object; application of income outside India with the same particulars; deemed application under section 341(5) with the reason for availing it; income accumulated or set apart under section 342(1) which has not been applied or deemed to be applied, with the purpose of accumulation; and money invested or deposited in the forms and modes referred to in section 350 and, separately, in forms and modes other than those referred to in section 350.
Sub-clause (iv) is the corresponding record out of income of any preceding tax year — application out of accumulated income, application out of a deemed application under section 341(5), other application out of income accumulated in a preceding year, each with the year of accumulation or deemed application, the amount applied, the name and address of the person credited or paid and the object, and again money invested or deposited within and outside the forms and modes referred to in section 350.
Sub-clause (v) covers donations made with a specific direction that they shall form part of the corpus: donations received during the tax year with the donor's name, address, Permanent Account Number if available and Aadhaar number if available; application out of them; amounts credited or paid towards corpus to any registered non-profit organisation; the section 350 forms and modes in which they are invested or deposited and, separately, other forms and modes; the same four records for corpus donations received in preceding tax years; and the amount invested or deposited back into a donation which was applied in a preceding tax year and not claimed as application, with the section 350 forms and modes.
Sub-clause (vi) covers donations for renovation or repair of a temple, mosque, gurdwara, church or other place notified under section 133(1)(b)(vi) which are treated as corpus under section 340, on the same pattern, and adds a record of donations received in a preceding tax year that are treated as corpus during the tax year. Sub-clause (vii) covers loans and borrowings: amount and date of the loan, amount and date of repayment, the lender's name, address, Permanent Account Number and Aadhaar number if available; application out of the loan and out of a loan received in a preceding tax year; and repayment during the tax year of a loan which was applied in a preceding tax year and not claimed as application.
Sub-clause (viii) covers properties held — for immovable property the nature, address, cost of acquisition and registration documents, and on transfer the net consideration utilised in acquiring the new capital asset; for movable property the nature and cost of acquisition. Sub-clause (ix) covers related persons as referred to in section 355(h): their name, address, Permanent Account Number and Aadhaar number if available, and the transactions undertaken with them showing date, amount, nature and documents to the effect that the transaction is, directly or indirectly, not for the benefit of such specified person. Sub-clause (x) is a residual category of any other documents containing any other relevant information.
Sub-rule (2) allows the books and documents to be kept in written form, electronic form, digital form, printouts of data stored in electronic or digital form, or any other form of electromagnetic data storage device.
Sub-rule (3) requires them to be kept at the registered office, subject to sub-rule (4). Sub-rule (4) permits all or any of them to be kept at such other place in India as the management may decide by way of a resolution, and where such a resolution is passed the organisation must, within seven days, intimate the jurisdictional Assessing Officer in writing with the full address of that other place, the intimation being duly signed and verified by the person authorised to verify the return of income.
Sub-rule (5) requires them to be kept and maintained for six years from the end of the relevant tax year, subject to sub-rule (6). Sub-rule (6) provides that where the assessment for any tax year has been reopened under section 279 within the period specified in section 282, the books and documents kept and maintained at the time of reopening shall continue to be so kept and maintained till the reopened assessment has become final.
Section 347 requires a registered non-profit organisation to keep books of account and other documents but does not say which. The exemption such an organisation enjoys turns on where its money came from, what it was applied to, what was accumulated and on what terms, and whether anything went to a related person — none of which an ordinary set of commercial books would show. This rule therefore prescribes not only the books but a parallel set of records keyed to the provisions that grant or deny the exemption: sections 337, 340, 341(5), 342(1), 344, 345, 346, 350, 355(h) and 355(j). It then fixes where those records are kept and for how long.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Time to intimate the jurisdictional Assessing Officer of a place other than the registered office | Seven days | From the passing of the management resolution deciding that other place in India; intimation in writing with the full address, signed and verified by the person authorised to verify the return of income | Sub-rule (4) |
| Retention period for books of account and other documents | Six years | From the end of the relevant tax year; subject to sub-rule (6) | Sub-rule (5) |
| Extended retention where an assessment is reopened | Till the assessment so reopened has become final | Where the assessment for a tax year has been reopened under section 279 within the period specified in section 282; applies to the books and documents kept and maintained at the time of reopening | Sub-rule (6) |
The heavy part of this rule is clause (d), not clause (a). Ordinary books will not answer it, because the records demanded are transaction-level and named: for almost every application of income the organisation must hold the amount, the name and address of the person credited or paid and the object of the payment, and for corpus donations and loans it must hold donor and lender identity down to Permanent Account Number and, where available, Aadhaar number. Money invested or deposited has to be recorded twice over — within the forms and modes referred to in section 350 and, separately, outside them — so the record itself discloses any deployment outside the permitted modes. Records also run backwards: sub-clauses (iv), (v) and (vi) require the current year's application out of earlier years' accumulations, deemed applications and corpus to be traced to the year of accumulation. Related person transactions under section 355(h) must be supported by documents to the effect that the transaction is, directly or indirectly, not for the benefit of that person, which places the material for that finding on the organisation's own shelf. On location and retention, the registered office is the default and any other place requires a management resolution and a seven-day written intimation to the jurisdictional Assessing Officer; six years is the ordinary retention period but sub-rule (6) overrides it where an assessment has been reopened under section 279, and there the obligation runs until that assessment becomes final, which may be much longer.
A registered non-profit organisation runs three institutions and also a business undertaking referred to in section 344. It keeps a cashbook, ledger and journal for the trust and a separate set for the undertaking, and alongside them a record showing that Rs. 40 lakh of the year's income was applied in India — with the name, address and object for each payee — that Rs. 10 lakh was credited to another registered non-profit organisation with its Permanent Account Number, and that Rs. 25 lakh was accumulated under section 342(1) with the purpose stated, of which Rs. 15 lakh sits in the forms and modes referred to in section 350 and Rs. 10 lakh does not. When the trustees resolve to move the records to a branch office in another city, they intimate the jurisdictional Assessing Officer in writing within seven days with the full address.
An organisation meets it continuously in the way it keeps its records, and squarely in any scrutiny, survey or registration proceeding where the Assessing Officer asks for the year-wise application, accumulation, corpus and related person records; the intimation under sub-rule (4) is the one filing the rule itself generates.
the registered non-profit organisation shall, within seven days thereof, intimate the jurisdictional Assessing Officer in writing, giving the full address of that other place
shall be kept and maintained for a period of six years from the end of the relevant tax year
the books of account and other documents which were kept and maintained at the time of reopening of the assessment, shall continue to be so kept and maintained till the assessment so reopened has become final