Section 345: restriction on commercial activities

What Section 345 says

"A registered non-profit organisation (other than a registered non-profit organisation mentioned in section 346) shall not carry out any commercial activity unless-- (a) such commercial activity is incidental to the attainment of the objectives of the registered non-profit organisation; and (b) separate books of account are maintained for such activities."

The two conditions

• The commercial activity must be incidental to the attainment of the organisation's own objectives - it cannot be a standalone commercial venture unrelated to the charitable or religious purpose
• Separate books of account must be maintained specifically for that commercial activity

A separate rule for "general public utility" organisations

Section 345 excludes organisations covered by Section 346, which sets a different and more specific rule for organisations carrying out advancement of any other object of general public utility - including a cap that aggregate receipts from commercial activity must not exceed 20% of the organisation's total receipts for the relevant tax year, along with its own separate books of account requirement.

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