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CS Professional · Advanced Direct Tax Laws and Practice · Tax Audit

Under the Income-tax Act, 2025 (applicable from the June 2027 session), the accounts of a registered non-profit organisation must be audited under section 348 when:

Audit under section 348 is required when the registered non-profit organisation's total income, computed without giving effect to the exemption provisions of the Part, exceeds the maximum amount not chargeable to income-tax in the tax year.

  1. AIts total income, before giving effect to the provisions of the relevant Part, exceeds the maximum amount not chargeable to tax in the tax yearCorrect
  2. BIts gross receipts exceed one crore rupees in the tax year
  3. CIts total income after claiming exemption exceeds the basic exemption limit
  4. DIt receives any donation in cash during the tax year

Explanation

Section 348 applies where the total income of the registered non-profit organisation, without giving effect to the provisions of the Part, exceeds the maximum amount not chargeable to income-tax in a tax year. The turnover test of one crore belongs to the business tax audit, and the test is applied before exemption, not after.

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