Taxation of non-profit compliance failures limits allowable expenditure and subjects regular, specified, and residual income to tax.

Section 353 taxes a registered non-profit organisation's regular income, reduced only by allowable expenditure, if it fails to maintain books, obtain an audit, furnish its return, or, for a general public utility organisation, contravenes commercial-activity restrictions. Allowable expenditure must be incurred in India for organisational objects and cannot be funded from corpus or borrowing, include duplicate claimed depreciation, donations or contributions, prohibited payments, or other disallowed claims. Specified and residual income not covered by the regular-income computation is also chargeable to tax.

---

---

---