Chapter XVII - Special Provisions Relating to Certain Persons
Section 333
Section 333: switching over of regimes
Section 333 deals with an organisation moving between the Section 332 registration-based exemption regime and certain other notified exemption regimes (under specified entries of Schedule III or Schedule VII). It stops an organisation from claiming benefits under both regimes at the same time.
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This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) Nothing contained in section 11, other than Schedule II (Table: Sl. No. 1), Schedule III (Table: Sl. Nos. 27 to 29 and 36) and Schedule VII (Table: Sl. Nos. 10 to 19 and 42 to 45), shall exclude any income of a registered non-profit organisation from its total income for that tax year.
(2) The registration under section 332 shall cease to operate from the date on which the registered non-profit organisation is notified as specified in Schedule III (Table: Sl. No. 27, 28, 29 or 36) or Schedule VII (Table: Sl. No. 42), or from the 1st day of April of the tax year for a registered non-profit organisation which claims exemption under Schedule VII (Table: Sl. No. 43, 44 or 45).
(3) A person, whose registration ceases to operate under sub-section (2), may apply for registration under section 332 subject to the condition that the notification granting exemption to such person under Schedule III (Table: Sl. No. 27, 28, 29 or 36) or Schedule VII (Table: Sl. No. 42) ceases to have effect from the date on which the said registration is granted and thereafter shall not be entitled to exemption under the respective serial numbers of the said Schedules.
Introduction
Section 333 coordinates registration under this Part with other non-profit tax regimes. An organisation needs to follow the statutory switching rule when moving between regimes.
Key takeaways
Registration and notification interact
The section coordinates NPO registration under section 332 with the specified exemption notifications.
Registration can cease
A section 332 registration ceases from the date the organisation is notified under the listed Schedule III entries.
Fresh registration is possible
An organisation whose registration ceased under this rule can apply again under section 332.
General exemptions do not automatically apply
Sub-section (1): nothing in Section 11 - other than a specific set of entries in Schedule II (Table Sl. No. 1), Schedule III (Table Sl. Nos. 27 to 29 and 36) and Schedule VII (Table Sl. Nos. 10 to 19 and 42 to 45) - excludes any income of a registered non-profit organisation from its total income for that tax year.
When Section 332 registration ceases to operate
Sub-section (2): the registration granted under Section 332 ceases to operate from the date the registered non-profit organisation is notified under Schedule III (Table Sl. No. 27, 28, 29 or 36) or Schedule VII (Table Sl. No. 42), or from 1 April of the tax year for an organisation that claims exemption under Schedule VII (Table Sl. No. 43, 44 or 45).
Re-applying for registration under Section 332
Sub-section (3): a person whose Section 332 registration ceases to operate under sub-section (2) may apply for fresh registration under Section 332. If granted, the earlier notification granting exemption under the relevant Schedule III/Schedule VII entries ceases to have effect from the date the new registration is granted, and the organisation is thereafter not entitled to exemption under those specific entries.
Step-by-step flow for applying Section 333
- 1
Is the organisation a registered non-profit organisation?
Section 333(1) says nothing in Section 11 excludes any of its income from total income, except the entries listed: Schedule II (Sl. No. 1), Schedule III (Sl. Nos. 27 to 29 and 36) and Schedule VII (Sl. Nos. 10 to 19 and 42 to 45).
- 2
Has it been notified under Schedule III (Sl. No. 27, 28, 29 or 36) or Schedule VII (Sl. No. 42)?
- Yes: Its Section 332 registration ceases to operate from the date of notification (Section 333(2)). Go to step 4.
- No: Go to the next step.
- 3
Does it claim exemption under Schedule VII (Sl. No. 43, 44 or 45)?
- Yes: Its Section 332 registration ceases to operate from 1 April of that tax year (Section 333(2)). Go to the next step.
- No: Its Section 332 registration continues to operate.
- 4
Does it want to return to Section 332 registration?
Under Section 333(3), a person whose registration has ceased may apply again under Section 332 (the Section 332(3) Table, Sl. No. 6, deals with this case).
- 5
Apply the condition on the notification
If registration is granted, the notification under Schedule III (Sl. No. 27, 28, 29 or 36) or Schedule VII (Sl. No. 42) ceases to have effect from the date of grant, and the person is not entitled to exemption under those entries afterwards.
Practical checklist
Do
- Identify the existing registration or approval and the intended new regime.
- Track when the earlier registration ceases and any fresh section 332 application requirement.
Avoid
- Claim incompatible exemptions simultaneously without checking the switching rule.
Illustrative example
Worked example: moving to a notified exemption and back
Hypothetical facts (illustration only, not a real taxpayer): A registered non-profit organisation running a research body is notified under Schedule VII (Sl. No. 42) with effect from 1 October 2026. Two years later its trustees want to move back to the registration regime under Section 332.
Effect of the notification
Under Section 333(2), its Section 332 registration ceases to operate from 1 October 2026, the date of notification.
Re-applying
Under Section 333(3), it may apply again under Section 332. The Section 332(3) Table (Sl. No. 6) allows the application at any time during the tax year from which the registration is to be made operative.
Cost of switching back
If registration is granted, the Schedule VII (Sl. No. 42) notification ceases to have effect from the date of grant, and the organisation cannot claim exemption under that entry afterwards.
Outcome
- The organisation cannot run both regimes at once; registration stops when the notification takes effect.
- Returning to Section 332 registration is a one-way choice for the notified entry concerned.
Frequently asked questions
Can a registered non-profit organisation claim both Section 332 registration and a Schedule notification exemption at the same time?
No. Section 333 is designed to prevent overlap - once an organisation is notified under the specified Schedule III or Schedule VII entries, its Section 332 registration ceases to operate, and vice versa once it re-registers under Section 332.
What happens if my organisation wants to move back to Section 332 registration?
It may apply for fresh registration under Section 332. Once granted, the earlier exemption notification under the relevant Schedule entries ceases to have effect from the date of the new registration.
Need help applying this provision to your situation?
Get advice on switching between exemption regimesLast updated 9 October 2026