Clause 341 - Application of income. - Income Tax Bill, 2025

Application of income. 341. (1) The following sums shall be allowed as application of income to a registered non-profit organisation: (a) any sum applied by it for charitable or religious purpose in India for which it is registered where such sum is, (i) paid during such tax year; and (ii) such payment is allowable under sections 36(4), (5), (6) and (7) and 35(b)(i); (b) 85% of the sum paid by way of donation made to any other registered non-profit organisation; and (c) nil, with respect to any sum paid as a corpus donation to any other registered non-profit organisation. (2) The application of income under sub-section (1) shall include the following: (a) the amount invested or deposited back during the tax year, in the modes permitted under section 350 maintained specifically for such corpus, if (i) such investment or depositing back is made within five years from the end of the tax year in which such application of income was made from the corpus; and (ii) the application of income from the corpus is made after the 31st March, 2021 and there was no violation of any provision of this Part, or any corresponding provision of the Income-tax Act, 1961 (43 of 1961) with respect to such application; (b) the amount repaid, during the tax year, towards any loan or borrowing where, (i) such repayment is within five years from the end of the tax year in which such application of income was made from the loan or borrowing; and (ii) the application of income from the loan or borrowing is made after the 31st March, 2021 and there was no violation of any provision of this Part, or any corresponding provision of the Income-tax Act, 1961 (43 of 1961) with respect to such application. (3) The following claims shall not be allowed as application of income under sub-sections (1) and (2): (a) the deduction or allowance by way of depreciation or otherwise claimed in respect of an asset acquisition of which has been claimed as an application of income in the same or any other tax year under this Part or under any corresponding provision of the Income-tax Act, 1961 (43 of 1961); or (b) a claim of set off or deduction or allowance of any excess application of any of the years preceding the tax year. (4) An application from corpus, loan or borrowing, accumulated income, specified income or deemed accumulated income shall not be considered as application for the purpose of sub-sections (1) and (2).