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of <h1>Non-profit organizations face 100-200% penalties under Clause 445 for diverting income to related persons</h1> Clause 445 of the Income Tax Bill, 2025 imposes penalties on registered non-profit organizations that divert income for the benefit of related persons, similar to Section 271AAE of the Income Tax Act, 1961. The provision establishes a two-tier penalty structure: 100% of the diverted amount for first violations and 200% for subsequent violations. It covers both direct and indirect benefits to related persons as defined in section 355(i). The penalty is triggered when specified income becomes chargeable to tax under section 337. This strict liability provision aims to prevent misuse of tax exemptions and ensure charitable funds serve their intended purposes, reflecting the legislature's commitment to robust oversight of the non-profit sector.
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