The new Income-tax Act, 2025 has completely recast the scheme for registration of charitable and religious organisations, non-profit companies and other not‑for‑profit entities. Section 332, titled “Application for registration”, is now the single gateway for obtaining tax‑exempt status as a registered non-profit organisation (NPO), replacing earlier provisions such as sections 12A, 12AA, 12AB and related approval sections under the 1961 Act.
This article explains the key provisions of section 332, with special focus on sub‑section (3) and its seven distinct situations, in a practical, tabular and practitioner‑friendly manner.
1. Legislative Background – From 12A/12AB to Section 332
Under the erstwhile Income‑tax Act, 1961, registration of charitable or religious trusts and institutions was primarily governed by sections 12A/12AA and later 12AB, together with specific approval provisions for donations (such as 80G) and certain category‑specific institutions.
The new Income‑tax Act, 2025 consolidates this regime through a modern “code” for non‑profits, with section 332 acting as the umbrella provision for registration of NPOs that want exemption on their income and access to related tax benefits.
Key shifts are:
- A single, unified registration section (332) covering most non‑profit forms instead of scattered provisions.
- A standardised application form (Form 105) with an in‑built table to capture seven specific situations specified in section 332(3).
- Time‑bound and condition‑based registration, moving away from open‑ended registrations under the old law.
2. Who Can Apply – Scope of Section 332(1)
Section 332(1) specifies the class of persons who can apply for registration as a “registered non‑profit organisation”. Broadly, the following are covered:
- Public charitable or public religious trusts (created under a written instrument or otherwise).
- Societies registered under the Societies Registration Act, 1860 or any corresponding law in force in India.
- Companies registered under section 8 of the Companies Act, 2013 (and similar earlier provisions).
- Other non‑profit bodies constituted or registered under any Central or State law and carrying on approved charitable or public religious objects.
The application has to be made to the Principal Commissioner or Commissioner, in the prescribed form and manner (presently Form 105, electronically filed).
3. Eligibility Conditions – Section 332(2)
Section 332(2) does not merely treat registration as a formality; it lays down basic substantive conditions that an organisation must satisfy in order to be eligible for registration.
The core conditions are:
- The entity must be constituted / registered / incorporated in India; and its objects must comprise one or more “charitable purposes” as defined in section 2(23) of the new Act or one or more public religious purposes.
- The properties of such person must be held under an irrevocable trust or legal obligation:
- wholly for charitable or religious purposes in India; or
- partly for charitable or religious purposes in India, if the entity was set up prior to the commencement of the 1961 Act.
These conditions give statutory shape to the long‑standing jurisprudence that tax exemption is only for genuine, irrevocable charitable or religious institutions whose property is held for public benefit and not for private profit.
4. Core of the New Regime – Section 332(3) and Its Seven Situations
Section 332(3) is the heart of the new registration mechanism and is also the provision that has been reflected in Form 105 in a tabular manner. It essentially classifies applications for registration into seven distinct “situations” based on:
- Whether the applicant is new or already existing.
- Whether it already holds registration under earlier law or under the new Act.
- Whether any exemptions or approvals (for example, equivalent of 80G) are already available or being sought.
Different situations have different time‑limits, documentation and type of registration (regular v. provisional). These are captured in the following table, which closely follows the structure of Form 105 and section 332(3).
Seven situations under section 332(3)
| Sl. No. | Situation under s. 332(3) (simplified description) | Typical examples | Broad nature of registration |
|---|---|---|---|
| 1 | New NPO set up and seeking first‑time registration before or shortly after commencement of activities. | Newly created public trust / Section 8 company formed in FY 2026 wanting exemption from the start. | Provisional or regular registration for a fixed period, based on nature and stage of activities. |
| 2 | Existing NPO already exempt / approved under old 1961 Act, now migrating to the new Act. | Trust registered under section 12AA/12AB and approved under 80G under the old Act. | Fresh registration under section 332 aligned to the new law, usually as regular registration with a defined validity. |
| 3 | Existing NPO not previously registered under old provisions but now wishing to register to claim exemption prospectively. | Older society that never obtained 12A/12AB registration but now wants exemption. | Regular registration from the assessment year specified, subject to satisfaction about genuineness of activities. |
| 4 | NPO seeking renewal / continuation after expiry of an existing time‑bound registration under the new Act. | Trust whose earlier registration under section 332 was granted for, say, 5 or 10 years and is expiring. | Renewal registration, with fresh scrutiny of compliance and activities during the previous registration period. |
| 5 | NPO seeking modification / conversion of registration due to change in objects, legal form or merger / de‑merger. | Trust converting into Section 8 company, or substantial change in objects clause. | Fresh registration or modified order; PCIT/CIT may examine whether amended objects remain charitable. |
| 6 | NPO earlier granted provisional registration now applying for regular registration after commencement of activities. | Newly formed trust that got provisional registration at inception and has now started actual charitable operations. | Regular registration based on accounts, activities and compliance for the provisional period. |
| 7 | NPO seeking registration in consequence of business reorganisation, succession or similar event. | Charitable hospital trust transferred to another entity in a scheme of arrangement. | Registration for successor with continuity of benefits, subject to conditions laid down in the scheme and law. |
The technical language and exact categorisation in the statute and Form 105 may slightly differ, but the practical effect is that every application for registration must fall into one of these seven situations and the applicant must tick the correct row in the table in Form 105.
5. Procedure and Timelines – How Registration Works in Practice
5.1 Application form and basic documentation
The application for registration is required to be made electronically in Form No. 105, as notified by the Central Board of Direct Taxes (CBDT). Form 105 itself is structured into several parts, including a table matching the seven situations under section 332(3).
Typical enclosures include:
- Foundational document: trust deed, memorandum and articles, bye‑laws, registration certificate under relevant statute.
- Details of trustees / office bearers, PAN, address and contact details.
- Copy of earlier registration / approval orders (where applicable) and details of exemptions claimed.
- Financial statements and activity reports for prescribed past years (for existing organisations). New entities commonly file projected statements and activity plans.
5.2 Authority, inquiry and order
The competent authority is the Principal Commissioner or Commissioner having jurisdiction. On receipt of an application, he/she may call for documents or information and may make such inquiries as deemed necessary to satisfy about the genuineness of activities and the compliance with statutory conditions in section 332(2).
Thereafter, an order is passed either:
- granting registration (provisional or regular, with specified validity); or
- rejecting the application, after providing an opportunity of being heard.
The new regime typically prescribes specific time‑limits within which the order has to be passed (for example, within a fixed number of months from the end of the month in which the application is received), though the exact period depends on the category/situation.
5.3 Validity period and renewal
Unlike the earlier indefinite registrations under section 12A/12AA, the new framework generally contemplates finite‑term registrations (for instance 5 or 10 years), after which a fresh application is needed. The precise validity, and whether the first registration is provisional or regular, depends on which of the seven situations is ticked and the detailed rules notified.
Failure to apply for renewal within the stipulated window can result in lapse of registration and consequent loss of exemption for the relevant years.
6. Substantive Compliance – Genuineness, Charitable Purpose and Benefit to Specified Persons
Registration under section 332 is a gateway, not a one‑time immunity. Once registered, an NPO must continue to comply with substantive conditions under the new Act, broadly analogous to earlier sections 11, 12 and 13 of the 1961 Act.
Key continuing conditions include:
- Income and property must be applied or accumulated strictly for the stated charitable or religious objects; diversion for private benefit is prohibited.
- Investments must be made in approved modes specified by law (equivalent of old section 11(5)); violation can trigger denial of exemption for the relevant year.
- No undue benefit can be given to specified related persons (analogous to section 13(3) list): lending without adequate security/interest, using property without adequate rent, paying excessive salary or selling assets at undervalue can lead to withdrawal of exemption.
Non‑compliance can lead to:
- Cancellation or non‑renewal of registration under section 332.
- Taxation of income that would otherwise have been exempt, as “regular income” of the NPO for the relevant tax year.
7. Practical Issues and Drafting Points for Trust Deeds
For professionals advising clients on new trust or NPO registration under section 332, the following practical points are important:
- Ensure that the founding document clearly states charitable or public religious objects in line with the statutory definition in section 2(23), avoiding profit‑oriented or vague objects.
- Insert explicit clauses that the trust / institution is irrevocable, that its assets are to be used only for its objects and that, on dissolution, remaining assets will be transferred to another registered NPO.
- Avoid any clause that can be interpreted as conferring personal benefit on the settlor, trustees, founders or related persons, except for reasonable remuneration for services actually rendered.
- At the time of filing Form 105, identify correctly which of the seven section 332(3) situations applies; an incorrect category can delay or jeopardise the registration.
8. Conclusion – Section 332 as the New Single Window for NPO Registration
Section 332 of the Income‑tax Act, 2025 thus operates as the single window for registration of all eligible non‑profit organisations and replaces the earlier patchwork of provisions in the 1961 law. Sub‑section (3) classifies every application into seven situations, each with specific timelines, documents and consequences, and is mirrored in the structure of Form 105.
For existing trusts, societies and section 8 companies, timely migration and renewal under the new regime is essential to preserve exemption, while new organisations must structure their objects and governance in line with the tightened statutory norms.
FCA, CWM (AAFM-US), CBV, CIFRS, R-ID, B.COM (H), RV* (IBBI)
Practising Chartered Accountant in Delhi NCR Since 2011.