Charitable approval requires Indian charitable purpose, capped religious expenditure, donor reporting, and verification of genuine activities.

Section 354 creates an approval regime for registered non-profit organisations and specified persons under the donor-deduction framework. Applicants must be established in India for charitable purposes, avoid benefits confined to a particular religious community or caste, cap religious expenditure at 5% of total income, restrict non-charitable asset transfers, maintain accounts, report donations, file corrections, and issue donor certificates. Initial applicants without commenced activities receive provisional approval; regular approvals and renewals depend on prescribed application timelines, inquiry into genuine activities and material legal compliance, and procedural hearing safeguards before adverse action.

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