Section 344
Section 344: business undertaking held as property
Section 344 addresses the situation where a registered non-profit organisation's property includes a business undertaking, and the organisation claims that the undertaking's income is eligible for the exemption benefits under this Part.
What Section 344 says
"Where the property held by a registered non-profit organisation includes a business undertaking, and where a claim is made that the income of any such undertaking is eligible for benefits under this Part, then the Assessing Officer shall have the power to determine the income of such business undertaking as per the provisions of this Act."
In other words, the Assessing Officer is not bound to simply accept the figures in the organisation's own books - the AO can independently determine the income of the business undertaking under the general provisions of the Act.
Why this matters
If the Assessing Officer determines the business undertaking's income to be higher than what is shown in the organisation's books of account, that excess becomes specified income under Section 337 (item 11 of the table), taxable in the tax year to which it relates.
Frequently asked questions
Can the tax department question the income shown for a business undertaking held by a non-profit organisation?
Yes - Section 344 gives the Assessing Officer the power to independently determine the income of a business undertaking held as property by a registered non-profit organisation, when a claim is made that its income is eligible for Part benefits.
What happens if the Assessing Officer determines a higher income than shown in the books?
The excess is treated as specified income under Section 337, taxable in the tax year to which the income relates, and taxed at 30% under Section 334(1)(a).
Related sections
Want this applied to your actual filing, not just explained?
Get your non-profit's business undertaking income reviewedLast updated 9 September 2026