Section 336
Section 336: taxable regular income
Section 336 contains the core "85% rule" familiar to anyone dealing with charitable trusts - it fixes how much of a registered non-profit organisation's regular income actually becomes taxable, based on how much was applied or accumulated for charitable or religious purposes during the year.
What Section 336 says
The taxable regular income of a registered non-profit organisation for any tax year is:
- Nil, where 85% or more of the regular income of that tax year has been applied under Section 341 or accumulated under Section 342 for charitable or religious purposes, in that tax year, as per the provisions of this Part
- In any other case, 85% of the regular income for that tax year, as reduced by the amount applied for charitable or religious purposes under Section 341 or accumulated under Section 342 in that tax year
Frequently asked questions
What is the minimum percentage of income a non-profit organisation must apply to charitable purposes to avoid tax?
85% of its regular income for the tax year, whether applied under Section 341 or accumulated under Section 342 - if 85% or more is applied or accumulated, taxable regular income is nil.
What happens if less than 85% of regular income is applied or accumulated?
The taxable regular income becomes 85% of the regular income for the year, reduced by whatever amount was actually applied under Section 341 or accumulated under Section 342.
Related sections
Want this applied to your actual filing, not just explained?
Plan your non-profit's 85% application requirementLast updated 9 September 2026