Section 350
Section 350: permitted modes of investment
Section 350 is the gatekeeping provision referenced throughout this Chapter (corpus donations, accumulated income, deemed accumulated income) - it fixes exactly where a registered non-profit organisation is allowed to park its money.
What Section 350 says
Sub-section (1): the modes of investing or depositing money under this Part are as specified in Schedule XVI.
Sub-section (2): modes of investing or depositing money under this Part, other than those specified in Schedule XVI, may be specified by the Central Government by notification.
Why this matters
Section 350 is the reference point for several other provisions in this Chapter - corpus donations under Section 339, deemed corpus donations under Section 340, accumulated income under Section 342, and deemed accumulated income under Section 343 must all be invested or deposited in a Section 350-permitted mode. An investment or deposit made in contravention of Section 350 is also listed as specified income (taxable at 30%) under Section 337.
Frequently asked questions
Where must a registered non-profit organisation invest its corpus or accumulated income?
Only in the modes specified in Schedule XVI, or any additional mode the Central Government notifies under Section 350(2).
What happens if an investment or deposit contravenes Section 350?
It becomes specified income under Section 337 (item 4 of the table), taxable in the tax year the investment or deposit is made, at 30% under Section 334(1)(a).
Related sections
Want this applied to your actual filing, not just explained?
Check whether your investment mode is Section 350-compliantLast updated 9 September 2026