Just a moment...

⚠✕
❮ Top
☎ Help
☰
×

By creating an account you can:

Logo TaxTMI
Keyword Search :
AI Tools : New
Ask tax questions in natural language. Powered by AI trained on the TaxTMI legal database. Use AI Tools ➞
Call Us / Help / Feedback✕

Contact Us At :

✉ E-mail: [email protected]

✆ Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
Make Most of Text Search ✕
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
    6. Text Search
  6. The system will try to fetch results that contains ALL your words.
  7. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
    8. Text Search
╳
Add to...
You have not created any category. Kindly create one to bookmark this item!
✕
Create New Category
Hide
Title :
Description :
❮❮ Hide
❮ Default View
Expand ❯❯
Close ✕
🔎 TMI Notes - Adv. Search ❯
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text ❯
  • Main Text
  • Main Text + AI Text
  • AI Text
Law:
---- All Laws----❯
  • ---- All Laws----
  • Benami Property
  • Bill
  • Central Excise
  • Companies Law
  • Customs
  • DGFT
  • FEMA
  • GST
  • GST - States
  • IBC
  • Income Tax
  • Indian Laws
  • Money Laundering
  • SEBI
  • SEZ
  • Service Tax
  • VAT / Sales Tax
Types:
---- All Types ---- ❯
  • ---- All Types ----
  • Act Rules
  • Case Laws
  • Circulars
  • Manuals
  • News
  • Notifications
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
RelevanceDefaultDate
    ManualsIncome Tax
    What is the impact of ICDS X containing transitional provisions.
    ManualsIncome Tax
    Under ICDS X, whether reversal of an asset and the related income would mean that the entry which wa...
    ManualsIncome Tax
    Can any expenditure should set off against a provision recognised for another expendiure.
    ManualsIncome Tax
    Expenditure on post-retirement benefits like provident fund, gratuity, etc. are covered by specific ...
    ManualsIncome Tax
    What is the manner of recording the borrowing costs.
    ManualsIncome Tax
    What are the activities necessary to prepare inventory for its intended sale as per ICDS IX.
    ManualsIncome Tax
    There are specific provisions in the Act read with Rules under which a portion of borrowing cos...
    ManualsIncome Tax
    How to allocate borrowing costs relating to general borrowing as computed in accordance with formula...
    ManualsIncome Tax
    Under ICDS IX does borrowing cost include exchange differences arising from foreign currency borrowi...
    ManualsIncome Tax
    Whether bill discounting charges and other similar charges would fall under the definition of borrow...
    ManualsIncome Tax
    Which are the borrowing costs covered by ICDS IX.
    ManualsIncome Tax
    What is the manner in which securities held as stock-in-trade are required to be valued.
    ManualsIncome Tax
    Para 9 of ICDS-VIII on securities requires securities held as stock-in-trade shall be valued at actu...
    ManualsIncome Tax
    Which ICDS would govern derivative instruments.
    ManualsIncome Tax
    For subsidy received prior to 1st day of April 2016 but not recognised in the books pending satisfac...
    ManualsIncome Tax
    How to deal with a situation where compensation is payable for the purposes of giving ‘immediate f...
    ManualsIncome Tax
    Whether a grant which is not directly relatable to non-depreciable assets should be concluded as an ...
    ManualsIncome Tax
    Where the grants are received for assets which are outside the block of assets, then what is the tre...
    ManualsIncome Tax
    Whether grants should be recognised even in cases where there is no certainty that the conditions at...
    ManualsIncome Tax
    How are Government grants to be recognized.
❮
❯
❯❯
MaximizeMaximizeMaximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

    +

    Are you sure you want to delete "My most important" ?

    NOTE:

    Open Link
    Notes
    Showing Results for :
    Reset Filters
    Results Found:
    Show All SummariesHide All Summaries
    ManualsIncome Tax
    What is the impact of ICDS X containing transitional provisions.
    Show AI Summary
    Transitional provisions for ICDS X ensure recognition of provisions and contingent items to prevent double taxation or omission.
    Transitional recognition under ICDS X requires that provisions, contingent liabilities and contingent assets and related income be recognised for previous years commencing on or after 1 April 2016 in accordance with this standard, after taking into account any amount recognised for the same items for previous years ending on or before 31 March 2016; the rule aims to prevent double taxation or omission of income.
    ManualsIncome Tax
    Under ICDS X, whether reversal of an asset and the related income would mean that the entry which wa...
    Show AI Summary
    Supremacy of tax law: reversal of an ICDS-recognised asset must follow tax deduction rules, permitting write-off as bad debt.
    Reversal of an asset and related income recognised under ICDS X must conform to the Income-tax Act where conflicts arise; the Act's tax-deduction treatment applies, allowing write-off as a bad debt rather than simply reversing the original accounting recognition entry.
    ManualsIncome Tax
    Can any expenditure should set off against a provision recognised for another expendiure.
    Show AI Summary
    Set-off of provisions: expenditures may be set off only against the original provision, not provisions for different purposes.
    Under ICDS X, expenditures must be set off only against the original provision for which they were recognised; expenditures cannot be offset against provisions recognised for a different event or purpose, as that would conceal the separate financial effects of distinct events and undermine transparent disclosure of provisions, contingent liabilities and contingent assets.
    ManualsIncome Tax
    Expenditure on post-retirement benefits like provident fund, gratuity, etc. are covered by specific ...
    Show AI Summary
    Employee post retirement benefit provisioning excluded from ICDS X, governed by specific statutory provisions for income computation.
    Provisioning for employee post retirement benefits covered by AS 15 shall continue to be governed by specific provisions of the Act and are not dealt with by ICDS X; ICDS X does not apply to liabilities otherwise falling within AS 15.
    ManualsIncome Tax
    What is the manner of recording the borrowing costs.
    Show AI Summary
    Borrowing costs capitalization requires capitalizing interest for qualifying assets; inventory only when production is prolonged.
    Borrowing costs directly attributable to acquisition, construction or production of tangible and intangible assets must be capitalized as part of the asset cost. Inventory borrowing costs are capitalized only when the inventory requires an extended period to become saleable. Specific borrowings for a qualifying asset require capitalization of actual borrowing costs incurred during the qualifying period. For general borrowings, a formulaic allocation apportions borrowing costs to qualifying assets based on the ratio of qualifying assets to total assets.
    ManualsIncome Tax
    What are the activities necessary to prepare inventory for its intended sale as per ICDS IX.
    Show AI Summary
    Inventory preparation processes define activities included in inventory cost when making goods fit and saleable under accounting standards.
    Activities necessary to prepare inventory for its intended sale include all processes required to make inventory functional for its intended use and to render it saleable, notably quality control to verify fitness for use and primary packing where goods are normally sold in packed condition.
    ManualsIncome Tax
    There are specific provisions in the Act read with Rules under which a portion of borrowing cos...
    Show AI Summary
    Borrowing cost capitalization must exclude portions disallowed by specific statutory provisions, only allowable amounts may be capitalised.
    Borrowing costs capitalised under ICDS IX must exclude amounts disallowed by specific provisions of the Act; only the portion of borrowing cost that remains allowable under the Act may be capitalised, because specific statutory disallowances override ICDS treatment.
    ManualsIncome Tax
    How to allocate borrowing costs relating to general borrowing as computed in accordance with formula...
    Show AI Summary
    Capitalization of borrowing costs: general borrowing must be allocated to qualifying assets and capitalized on an asset-by-asset basis.
    General borrowing costs computed under the ICDS-IX formula must be apportioned among qualifying assets and capitalized on an asset-by-asset basis, so that each qualifying asset's capitalized borrowing cost reflects its proportionate share of general borrowing under the standard.
    ManualsIncome Tax
    Under ICDS IX does borrowing cost include exchange differences arising from foreign currency borrowi...
    Show AI Summary
    Exchange differences excluded from borrowing costs under ICDS IX; foreign exchange effects governed by ICDS VI.
    Exchange differences from foreign currency borrowings that are treated as adjustments to interest are excluded from borrowing costs under ICDS IX; the effects of changes in foreign exchange rates, including those relating to interest, are governed by ICDS VI.
    ManualsIncome Tax
    Whether bill discounting charges and other similar charges would fall under the definition of borrow...
    Show AI Summary
    Borrowing cost: bill discounting and similar charges treated as borrowing cost, except when not tied to borrowed funds.
    The definition of borrowing cost is inclusive and generally covers bill discounting charges and similar charges as borrowing cost for income computation and disclosure; however, discounting charges that do not arise from borrowing funds are excluded from that definition.
    ManualsIncome Tax
    Which are the borrowing costs covered by ICDS IX.
    Show AI Summary
    Borrowing costs include interest and related charges such as commitment charges, amortised discount and finance lease charges.
    Borrowing costs under ICDS IX comprise interest and other costs incurred in connection with borrowing funds, including commitment charges, amortised discount or premium, amortised ancillary costs in arranging borrowings, and finance charges for assets taken on finance lease.
    ManualsIncome Tax
    What is the manner in which securities held as stock-in-trade are required to be valued.
    Show AI Summary
    Valuation of securities as stock-in-trade: mandatorily at lower of actual cost and net realizable value.
    Securities held as stock-in-trade must be valued at the lower of actual cost initially recognized and net realizable value at year-end. Unlisted or unquoted securities held as stock-in-trade are to be measured at actual cost as initially recognized, under the income computation and disclosure standards framework.
    ManualsIncome Tax
    Para 9 of ICDS-VIII on securities requires securities held as stock-in-trade shall be valued at actu...
    Show AI Summary
    Valuation of securities: aggregate category wise cost compared with net realisable value, lower amount taken as carrying value.
    For subsequent measurement under ICDS VIII, securities held as stock in trade are aggregated category wise; for each category the aggregate cost and aggregate net realisable value are compared, and the lower of the two is taken as the carrying value.
    ManualsIncome Tax
    Which ICDS would govern derivative instruments.
    Show AI Summary
    Derivatives accounting: ICDS VI governs typical derivatives, ICDS I applies residually, capital-asset derivatives are excluded.
    ICDS VI supplies guidance for derivative contracts such as forward contracts; derivatives outside ICDS VI's scope fall under ICDS I. Derivative instruments that qualify as capital assets are excluded from ICDS and thus not governed by those standards.
    ManualsIncome Tax
    For subsidy received prior to 1st day of April 2016 but not recognised in the books pending satisfac...
    Show AI Summary
    Recognition of government grants: pre-existing grants deemed recognised on receipt while later grants follow ICDS recognition criteria.
    Grants actually received before the ICDS effective date are deemed recognised on receipt under Para 4(2) of ICDS VII and remain governed by pre-ICDS law; grants received on or after the effective date must be recognised only when the ICDS VII recognition criteria in Paras 5-9 are satisfied, with recognition then following ICDS VII.
    ManualsIncome Tax
    How to deal with a situation where compensation is payable for the purposes of giving ‘immediate f...
    Show AI Summary
    Government grant for immediate financial support must be recognised when receivable, irrespective of actual receipt.
    Government grants given as immediate financial support and not tied to specific expenditure must be recognised when the grantee is entitled and sums become receivable; actual receipt is immaterial. If the grant is confined to an individual enterprise and grant-related conditions are met, recognition occurs in the period of receivability, governing timing of income inclusion and disclosure under the income computation framework.
    ManualsIncome Tax
    Whether a grant which is not directly relatable to non-depreciable assets should be concluded as an ...
    Show AI Summary
    Government grants treatment: grants not directly relatable to nondepreciable assets treated as taxable income rather than reduction in asset cost.
    Grants not directly relatable to nondepreciable assets are to be recognised as taxable income under the Act rather than deducted from asset cost; the ICDS preamble confirms the Act prevails over ICDS, and paragraph 7 of ICDS VII applies solely to depreciable assets where reduction of asset cost is appropriate.
    ManualsIncome Tax
    Where the grants are received for assets which are outside the block of assets, then what is the tre...
    Show AI Summary
    Recognition of government grants: generally recognized as income on receipt unless reasonable certainty permits spreading with related costs.
    Grants for assets outside the block of depreciable assets are to be recognized as income; statutory tax provisions control and preclude spreading recognition beyond the year of receipt, except where there is reasonable certainty of receipt permitting deferral and matching with costs incurred for obligations related to the non-depreciable assets.
    ManualsIncome Tax
    Whether grants should be recognised even in cases where there is no certainty that the conditions at...
    Show AI Summary
    Recognition of government grants: must occur on receipt; potential reversals are applied against unamortized deferred credit balances.
    ICDS VII requires government grants to be recognised on the date of receipt and prohibits deferral beyond receipt; where grants become refundable because attached conditions are unmet, reversal of initial recognition must first be applied to the unamortized deferred credit arising from the grant, so income recognition must reflect both receipt and the certainty of meeting conditions.
    ManualsIncome Tax
    How are Government grants to be recognized.
    Show AI Summary
    Recognition of government grants requires reasonable certainty of compliance and receipt; disclose in income computation accordingly.
    Under ICDS VII, government grants are to be recognized when there is reasonable certainty that the related conditions will be complied with and that the grants will be received; such grants should not be postponed beyond the actual receipt date for income computation and disclosure purposes.

    TMI Notes

    Back

    All TMI Notes

    Showing Results for :
    Reset Filters
      No Records Found

      TMI Notes

      Home› TMI Notes › Income Tax › Act-Rules › Category › This
      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters
      Income Tax

      Comparison of section 337 "Specified income." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

      11 September, 2025

      Contents
      Acts
      Rules & Regulations
      Summary
      Note

      Note

      -

      Bookmark

      Print

      Print

      Print Options

      Section 337 Specified income

      Income-tax Act, 2025

      At a Glance

      This document is Clause 337 of the Income Tax Bill, 2025 (Old Version), which defines "specified income" of a registered non-profit organisation and prescribes the tax year in which each category of specified income is taxable. It matters to registered non-profit organisations, tax authorities, and advisers overseeing compliance and application of tax exemptions. Effective date or decision date: Not stated in the document.

      Background & Scope

      Statutory hook: Clause 337 of the Income Tax Bill, 2025 (Old Version). The clause sets out a table enumerating categories of "specified income" of a registered non-profit organisation and prescribes the tax year in which each category is to be taxed. Definitions: The text does not provide standalone definitions for "registered non-profit organisation," "specified income," or other terms beyond the entries in the table. Not stated in the document: legislative purpose, explanatory notes, or effective date.

      Statutory Provision Mode

      Text & Scope

      Clause 337 lists 11 categories of income that qualify as "specified income" for registered non-profit organisations and assigns the taxable year for each category. The categories include: (1) anonymous donations (with an exclusion up to Rs.1,00,000 or 5% of donations), (2) income applied for benefit of related persons, (3) income applied outside India contrary to section 338(a), (4) investments made contrary to section 350 out of various funds, (5) deemed corpus donations violating section 340 conditions, (6) accumulated income applied to non-charitable/religious purposes, (7) accumulated income ceasing to be set apart for specified purposes u/s 342(1), (8) accumulated income not utilised within the period specified in section 342(1), (9) accumulated income credited or paid to another registered non-profit organisation, (10) income applied to purposes other than those for which the organisation is registered, and (11) income determined by the Assessing Officer u/s 344 in excess of income shown in books of a business undertaking.

      Interpretation

      The clause adopts a categorized, prescriptive approach: each identified event or failure resulting in income losing its non-taxable character is captured and linked to the tax year when taxation will arise. The text implies a legislative intent to specify distinct triggers for taxation of amounts that otherwise might be treated as exempt or charitable receipts. Specific interpretive guidance (e.g., definitions of "related person" or computation method) is not provided beyond cross-references; where procedural computation is required the clause says "computed in the manner, as prescribed" indicating delegated rules are expected. Not stated in the document: any legislative history or materials explaining the choice of triggers.

      Exceptions/Provisos

      The clause contains limited carve-outs: the anonymous donation rule excludes donations up to Rs.1,00,000 or 5% of total donations (whichever is higher) and exempts anonymous donations received by organisations "created or established wholly for religious purposes." No other explicit exceptions or provisos appear in Clause 337. Not stated in the document: any special thresholds for other items, or transitional provisions.

      Illustrations

      • Example 1: A registered non-profit organisation receives an anonymous donation of Rs.50,000 in a tax year and total donations in that year are Rs.10,00,000. Threshold (Rs.1,00,000 or 5% of total donations = Rs.1,00,000 vs Rs.50,000) - the donation equals Rs.50,000 which is below Rs.1,00,000, so it is excluded from specified income. Not stated in the document: treatment beyond this illustration (e.g., reporting procedure).
      • Example 2: An organisation applies a portion of its income for the benefit of a related person; that portion will be taxable in the tax year in which the application is made, "computed in the manner, as prescribed." Not stated in the document: who is a "related person" or the computation formula.
      • Example 3: An Assessing Officer determines additional income u/s 344 in excess of books for a business undertaking run by the organisation; such income is taxable in the tax year to which that income relates. Not stated in the document: standards of assessment or appeals procedure.

      Interplay

      The clause cross-references other provisions (sections 338(a), 340, 341(1)-(4), 342(1), 344, and 350), indicating reliance on these sections for specifying conduct that will convert otherwise exempt income into taxable specified income. The clause anticipates subordinate legislation by using "as prescribed" for computation. Not stated in the document: text of the referenced sections or the specific rules that will prescribe computations or definitions.

      Differences Between Document 1 (Section 337, Income-tax Act, 2025) and Document 2 (Clause 337, Income Tax Bill, 2025 (Old Version))

      Summary of textual differences and practical impact:

      • Broader exclusion for religious organisations (anonymous donations): Document 1 excludes anonymous donations for organisations "created or established,- (i) wholly for religious purposes, or (ii) wholly for charitable and religious purposes (excluding anonymous donation made with a specific direction that such donation is for any university or other educational institution or any hospital; or other medical institution run by such registered non-profit organisation)." Document 2 excludes only organisations "created or established wholly for religious purposes."
        • Practical impact: Document 1 provides a narrower exception (it adds a carve-out for organisations "wholly for charitable and religious purposes" but then expressly excludes certain directed donations for educational and medical institutions). This may reduce the number of anonymous donations treated as non-specified income for organisations running both charitable and religious activities, especially where donations are directed to educational or medical institutions.
      • Quantitative phrasing and punctuation differences (anonymous donation threshold): Both versions retain the threshold "up to Rs.1,00,000 or 5%," but Document 1 adds "or 5% of the total donations received by it during the tax year, whichever is higher," while Document 2 uses "or 5% of the such donations received by it during the tax year, whichever is higher."
        • Practical impact: Substantively the threshold appears the same; Document 1's phrasing is slightly clearer by specifying "total donations." No material change to tax effect is apparent.
      • Wording changes re: investments/deposits: Document 1 (items 4 and related) refers to "Any investment or deposit made in contravention to the provisions of section 350," whereas Document 2 refers to "Any investment made in contravention to the provisions of section 350."
        • Practical impact: Document 1 explicitly captures both investments and deposits; Document 2 captures only investments. This broadens the reach in Document 1 to include deposits that may have been omitted previously.
      • Additional items in Document 1 (more entries in the table): Document 1 includes several items absent from Document 2: numbered items 12 and 13 (fair market value of non-specified asset held beyond one year; any deemed application u/s 341(5) not actually applied within the period specified in section 341(6)). Document 2's table ends at item 11.
        • Practical impact: Document 1 expands the list of specified income events, creating additional contingencies where income will be taxed (e.g., failure to hold assets in specified forms/modes, failure to actually apply deemed application amounts abroad/time limits). This increases compliance exposures for registered non-profit organisations.
      • Variation in language for accumulated income utilisation (item 8): Document 1 describes "if it is not applied as per the provisions of section 341(1) to (4) for which it is accumulated or set apart within the period for which it was accumulated or set apart as specified in section 342(1)." Document 2 uses "if it is not utilised for the purpose, for which it is accumulated or set apart within the period for which it was accumulated or set apart as specified in section 342(1)."
        • Practical impact: Document 1 ties the failure to application specifically to sections 341(1)-(4), which may be a clarifying reference to specified modes of application; Document 2 uses broader language "utilised for the purpose." The change narrows the trigger in Document 1 to non-compliance with the procedural application provisions.
      • Formatting and minor drafting clarifications: Document 1 contains more detailed cross-references and slightly different punctuation/wording across multiple clauses (e.g., "computed in the manner, as may be prescribed" vs "computed in the manner, as prescribed").
        • Practical impact: Mainly drafting clarity; limited substantive effect beyond the changes noted above.

      Practical Implications

      • Compliance and risk areas: Registered non-profit organisations must monitor anonymous donations relative to the stated threshold and ascertain whether donations are directed or truly anonymous; they must also ensure that applications of income (domestic and foreign), investments/deposits, treatment of accumulated income, and use of corpus conform to the referenced sections to avoid specified income classification.
      • Record-keeping/evidence: The clause implies the necessity of records evidencing donor directions, use of funds, dates of application of income, details of investments/deposits (to show compliance with section 350), and documentary evidence supporting any inter-organisation credits or payments. Not stated in the document: exact documentary standards or retention periods.

      Key Takeaways

      • Clause 337 enumerates 11 categories of "specified income" for registered non-profit organisations and ties each to a specific tax year for taxation.
      • Anonymous donations are partly excluded up to Rs.1,00,000 or 5% of total donations, and donations to organisations "wholly for religious purposes" are exempt from being specified income under this clause.
      • Several operational failures (application to related persons, investments/deposits contrary to section 350, misuse of accumulated income, failure to meet corpus conditions) convert funds into taxable specified income.
      • The clause delegates computation of certain items ("as prescribed") and relies on other substantive provisions (sections 338, 340, 341, 342, 344, 350), but does not define key terms such as "related person" or set out procedural details.
      • Organisations face increased compliance obligations to track uses of funds, inter-organisational transfers, and investments/deposits to avoid taxation under these triggers.

      Full Text:

      Section 337 Specified income

      Topics

      ActsIncome Tax
      Next ➔