Section 349: return of income

Introduction

Section 349 requires a return where the registered non-profit organisation’s total income before applying this Part exceeds the applicable maximum amount not chargeable to tax. The current permitted timing includes Section 263(1)(c) or Section 263(4).

The provision cross-refers to the return rules in section 263; current-year changes to those rules must be checked before relying on a deadline.

Key takeaways

Work out the filing route

Calculate total income for the tax year without giving effect to this Part. If it exceeds the maximum amount not chargeable to income-tax, Section 349 requires a return under Section 263(1)(a)(iii) and (2).

Next identify whether the time limit under Section 263(1)(c) or, where applicable, Section 263(4) governs the return. The Section 263(4) cross-reference was inserted by Finance Act 2026. Check the applicable Section 263 route and current filing requirements before recording a calendar deadline; Section 349 itself does not give one.

When this provision applies

Calculate the organisation’s total income without applying this Part before deciding whether the Section 349 threshold is crossed. A nil amount after NPO benefits does not by itself remove this filing obligation.

After the threshold test, identify the return requirements in Section 263(1)(a)(iii) and (2), including the appropriate form, verification and information. Keep the return filing and the separate audit-report obligation distinct.

Limits and procedural safeguards

The current provision expressly includes the Section 263(4) time limit following Finance Act 2026. Do not treat every return after the ordinary due date as automatically outside Section 349.

Section 263(4) is the belated-return route: nine months from the end of the relevant tax year or completion of assessment, whichever is earlier. This is different from the revised-return and updated-return routes.

Failure to furnish the required return can engage Section 353’s separate taxable-regular-income computation. Do not assume either a total exemption or automatic taxation of every receipt without applying that provision.

Step-by-step review

1. Prepare the pre-benefit total-income working and compare it with the applicable maximum amount not chargeable to tax.

2. Identify the applicable Section 263 return category and ordinary time limit.

3. If the ordinary deadline was missed, check whether the Section 263(4) window remains open, including whether assessment has been completed.

4. File and verify the required return, reconcile the audit and income records, and retain the acknowledgement and timing evidence.

Hypothetical example

Hypothetical: an organisation’s pre-benefit total income exceeds the applicable threshold but its taxable regular income becomes nil after qualifying application. The nil final amount does not remove Section 349’s filing test. It should identify the proper Section 263 route and file within its applicable time limit.

Records to prepare

Keep the threshold calculation before applying NPO benefits and the working supporting the applicable filing deadline.

Retain the filed return, verification acknowledgement, audit-report records and assessment-status evidence where the belated route is relevant.

Official amended Act source

• Income-tax Act, 2025 as amended by Finance Act, 2026: Section 349 and related provisions

Step-by-step flow for applying Section 349

1. 1

   Compute total income without giving effect to this Part

   The same test as in Sections 347 and 348.

2. 2

   Does it exceed the maximum amount not chargeable to income-tax for that tax year?

   • No: Section 349 does not require a return for that year.
   • Yes: Go to the next step.
3. 3

   Furnish the return as per Section 263(1)(a)(iii) and (2)

   Section 349 points to these provisions for how the return is furnished.

4. 4

   File within the time allowed

   The time limit is the one under Section 263(1)(c) (the due date) or Section 263(4) (a return furnished after the time allowed under Section 263(1)). Failing to furnish the return is covered by Section 353(1)(c).

Practical checklist

Glossary

Pre-benefit total income

Total income calculated without giving effect to this Part for the Section 349 threshold test.

Belated return

A return under Section 263(4) filed within that subsection’s specified window after the ordinary filing time was missed.

Frequently asked questions