Charitable Purpose u/s 2(23)

The expression “charitable purpose” has been defined under Section 2(23) of the Income Tax Act 2025 to include:

(a) relief of the poor;

(b) education;

(c) yoga;

(d) medical relief;

(e) preservation of environment (including watersheds, forests and wildlife);

(f) preservation of monuments or places or objects of artistic or historic interest;

(g) the advancement of any other object of general public utility;

However, the scope of advancement of any other object of general public utility is limited by Section 346. According to this section, if an NGO carries on any commercial activity, it will be considered as Charitable under the general public utility only if:

1. such activity is carried out in the course of actual carrying out of such object
2. the aggregate receipts from such commercial activity do not exceed 20% of total receipts of the relevant tax year; and
3. separate books of account are maintained for such activity.