Chapter XVII - Special Provisions Relating to Certain Persons
Section 339
Section 339: corpus donation
Section 339 defines exactly what qualifies as a "corpus donation" for a registered non-profit organisation - a term used throughout this Chapter, including in the exclusion under Section 338(b) and the deemed-corpus rule in Section 340.
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Need advice on Section 339?
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
Corpus donation means any donation made with a specific direction by the donor that it shall form part of the corpus of the registered non-profit organisation provided that such donation is invested or deposited in any of the modes permitted under section 350 maintained specifically for such corpus.
Introduction
Section 339 defines a corpus donation by both the donor’s specific direction and the organisation’s handling of the money.
The donation must be invested or deposited in a section 350 permitted mode maintained specifically for the corpus.
Key takeaways
Donor direction is essential
The donor must specifically direct that the donation form part of the registered organisation's corpus.
Corpus investment is also required
The donation must be invested or deposited in a Section 350-permitted mode maintained specifically for that corpus.
What Section 339 says
A general donation does not meet the definition without the donor's specific corpus direction. The investment or deposit condition also has to be met; the donor's instruction alone is insufficient.
The two conditions that must both be met
- The donor must give a specific direction that the donation is to form part of the organisation's corpus - a general or undirected donation does not qualify
- The donation must be invested or deposited in a mode permitted under Section 350, maintained specifically for that corpus
Evidence to check for a corpus donation
Retain the donor's specific direction that the donation form part of corpus, record the receipt as corpus, and identify the investment or deposit maintained specifically for that corpus. Verify that the mode is permitted under section 350, including any applicable notification.
These records help demonstrate the two statutory conditions; section 339 does not prescribe a particular document format. A board decision made after receiving an unrestricted donation is not the donor's specific direction.
Step-by-step flow for applying Section 339
- 1
Is the receipt a donation to a registered non-profit organisation?
- No: Section 339 does not apply.
- Yes: Go to the next step.
- 2
Did the donor give a specific direction that it shall form part of the corpus?
- No: It is not a corpus donation; treat it as a voluntary contribution under Section 335(d).
- Yes: Go to the next step.
- 3
Is the donation invested or deposited in a mode permitted under Section 350?
- No: The proviso is not met, so it is not a corpus donation under Section 339.
- Yes: Go to the next step.
- 4
Is that investment or deposit maintained specifically for the corpus?
- Yes: It is a corpus donation. Under Section 338(b) it is not included in regular income.
- No: The condition is not met, so it is not a corpus donation under Section 339.
Practical checklist
Do
- Keep the donor’s specific written direction that the donation forms part of corpus.
- Track the donation in a separately maintained investment or deposit mode permitted by section 350.
Avoid
- Treat an unrestricted general donation as corpus solely because the organisation later designates it that way.
Illustrative example
Worked example: two donations, one corpus
Hypothetical facts (illustration only, not a real taxpayer): A registered charitable trust receives two donations in a tax year. Donor A gives an assumed ₹5,00,000 with a written direction that it forms part of the corpus; the trust deposits it in a separate account in a mode permitted under Section 350, kept only for the corpus. Donor B gives an assumed ₹2,00,000 with no direction.
Donor A: direction
There is a specific direction that the money forms part of the corpus.
Donor A: investment
It is deposited in a Section 350 mode maintained specifically for the corpus, so the proviso is met. ₹5,00,000 is a corpus donation.
Donor B
No corpus direction, so the ₹2,00,000 is a voluntary contribution in regular income under Section 335(d).
Effect
Under Section 338(b), the ₹5,00,000 corpus donation is not included in regular income.
Outcome
- ₹5,00,000 is a corpus donation; ₹2,00,000 is regular income.
- If the ₹5,00,000 had been kept in a general account with other funds, it would not meet Section 339.
Frequently asked questions
Does every donation to a charitable trust count as a corpus donation?
No - only a donation made with a specific direction from the donor that it forms part of the organisation's corpus, and that is invested or deposited in a Section 350-permitted mode maintained specifically for that corpus.
Why does the corpus donation definition matter?
Corpus donations are excluded from regular income under Section 338(b), and the concept is also used in the deemed corpus donation rule for temples, mosques, gurudwaras and churches under Section 340.
Need help applying this provision to your situation?
Check whether your donation qualifies as a corpus donationLast updated 2026-10-10