Chapter XVII - Special Provisions Relating to Certain Persons
Section 348
Section 348: audit
Section 348 requires a registered non-profit organisation crossing the same income threshold used in Section 347 to have its accounts audited by an accountant, and to furnish an audit report in the prescribed form.
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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
Where the total income of a registered non-profit organisation, without giving effect to the provisions of this Part, exceeds the maximum amount which is not chargeable to income-tax in any tax year, the accounts of such registered non-profit organisation for that tax year shall be audited by an accountant and the person in receipt of the income shall be required to furnish a report of an audit of such income by such date in the prescribed form, duly signed and verified by such accountant and setting forth such particulars, as may be prescribed.
Introduction
Section 348 requires an audit for a registered non-profit organisation where its income reaches the statutory condition.
The audit report must be furnished in the prescribed form by the specified time, with the particulars required by the provision.
Key takeaways
The trigger is pre-exemption income
The audit requirement applies if total income before this Part's provisions exceeds the maximum amount not chargeable to tax.
Two tasks follow
Accounts for that year must be audited by an accountant, and the person receiving the income must furnish the prescribed signed and verified audit report by the prescribed date.
What Section 348 says
Once the pre-exemption income threshold is crossed, the organisation needs both an audit of that year's accounts and a prescribed audit report furnished by the required date.
Check the threshold, then complete both steps
First compute total income for the tax year without giving effect to this Part and compare it with the maximum amount not chargeable to income-tax. If it exceeds that amount, arrange an audit of that tax year's accounts by an accountant. The person in receipt of the income must then furnish the report by the prescribed date, in the prescribed form, signed and verified by that accountant and containing the prescribed particulars.
Keep the threshold working, audited accounts and evidence that the report was furnished. Finishing the audit alone does not meet the separate report-furnishing requirement. Check the applicable rules for the form and date; Section 348 does not state them.
What is required
The trigger is the same pre-exemption total income test as in Section 347 - if total income (before giving effect to this Part's exemptions) exceeds the maximum amount not chargeable to tax for the tax year, then:
- The organisation's accounts for that tax year must be audited by an accountant
- The person in receipt of the income must furnish an audit report, in the prescribed form, by the prescribed date, duly signed and verified by the accountant, and setting forth the prescribed particulars
Step-by-step flow for applying Section 348
- 1
Compute total income without giving effect to this Part
The test is the same as in Section 347: ignore the benefits of this Part.
- 2
Does it exceed the maximum amount not chargeable to income-tax for that tax year?
- No: Section 348 does not require an audit for that year.
- Yes: Go to the next step.
- 3
Get the accounts for that tax year audited by an accountant
Section 348 requires the audit of the organisation's accounts for that tax year.
- 4
Furnish the audit report
The person in receipt of the income furnishes the report in the prescribed form, by the date prescribed, signed and verified by the accountant and giving the prescribed particulars. A failure to get the books audited is covered by Section 353(1)(b).
Practical checklist
Do
- Check the audit trigger using income before the stated exemptions.
- Appoint the required accountant and track the audit-report due date.
Avoid
- Assume registration alone removes the audit requirement.
Illustrative example
Worked example: who files the audit report
Hypothetical facts (illustration only, not a real taxpayer): A registered trust has total income of ₹25,00,000 for a tax year before giving effect to this Part. Assume this is above the maximum amount not chargeable to income-tax for that year. The trust's managing trustee receives the income on its behalf.
Threshold
₹25,00,000 exceeds the maximum amount not chargeable to income-tax, so Section 348 applies.
Audit
The trust's accounts for that tax year are audited by an accountant.
Report
The managing trustee, as the person in receipt of the income, furnishes the audit report in the prescribed form, signed and verified by the accountant.
Timing
The report must be furnished by the date prescribed; Section 348 itself does not state the date.
Outcome
- The audit and report are required because income before this Part's benefits exceeds the limit.
- Without the audit, Section 353(1)(b) applies for that tax year.
Frequently asked questions
When does a registered non-profit organisation need a tax audit report?
When its total income, computed without giving effect to the exemptions under this Part, exceeds the maximum amount not chargeable to income-tax for that tax year.
Who signs the audit report under Section 348?
An accountant, who must sign and verify the report in the prescribed form, setting forth the prescribed particulars.
Need help applying this provision to your situation?
Get your non-profit organisation's accounts auditedLast updated 2026-10-10