Section 352 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 352 of the Income-tax Act, 2025 charges additional income-tax on the "accreted income" of a specified person, that is, a person who has been registered as a non-profit organisation, in the cases listed in the Table in sub-section (4). This first article covers sub-sections (1) to (3) and serial numbers 1 to 5 of the Table in sub-section (4). The remaining serial numbers and sub-sections (5) to (8) are in the second article on section 352. It follows the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026.
Every specified person is liable, in addition to income-tax on total income, to pay additional income-tax on accreted income at the maximum marginal rate in the cases in column B(i) and (ii) of the Table. Accreted income is A = B - C: fair market value of total assets less total liability on the specified date, reduced for specified assets and related liabilities. The tax is payable within fourteen days from the due date in column D by the specified person and its principal officer or trustee. Section 352 was amended by the Finance Act, 2026 (serial number 8 of the Table, covered in the second article).
Where section 352 sits
Section 352 is in part 5, "Violations", of Part B of Chapter XVII, between section 351 (specified violations, covered in our post on sections 351 and 353) and section 353. See also the Chapter XVII guide and our post on section 332 (registration). Later amendments, rules and notifications should be checked.
For help with trust and society compliance see our page on 12A, 80G and CSR registration.
Who is a "specified person"
Section 355 defines the terms:
- "Specified person" means any person which is registered under any specified provision at any time since its incorporation or creation (section 355(l)).
- "Specified provision" means section 12A, 12AA or 12AB or section 10(23C) of the Income-tax Act, 1961 (43 of 1961), or section 332 (section 355(m)). The reference to the 1961 Act is quoted as printed; check that Act where it matters to you.
So an organisation registered under the earlier Act's provisions named there, or under section 332, is a specified person. See our post on section 355.
Section 352(1): the charge
A specified person shall, in addition to the income-tax chargeable on total income, be liable to pay additional income-tax on accreted income at the maximum marginal rate in any of the cases in column B(i) and (ii) of the Table in sub-section (4). The Act speaks of the maximum marginal rate and prints no figure in this section; this article states none.
Section 352(2): the formula
Accreted income is computed by this formula: A = B - C, where:
| Symbol | Meaning |
|---|---|
| A | Accreted income |
| B | Aggregate fair market value of the total assets of the specified person, as on the date specified in column C of the Table, computed by such method of valuation as may be prescribed |
| C | Total liability of the specified person, as on the date specified in column C of the Table, computed by such method of valuation as may be prescribed |
The method of valuation is left to the Income-tax Rules, 2026; see our rule-wise guides, for example the post on valuation for accreted income.
Section 352(3): reduction for specified assets
The accreted income so computed is reduced by the amount of accreted income attributable to specified assets, and liabilities, if any, related to those assets. Section 355(k) defines "specified asset" at some length, including an asset directly acquired out of income of the nature referred to in Schedule II (Table, serial number 1), and an asset transferred within twelve months in a case under serial number 9 of the Table.
Section 352(4): who pays, and by when
The specified person and the principal officer or trustee of the specified person are liable to pay the tax on accreted income to the credit of the Central Government within fourteen days from the due date specified in column D of the Table. The Table has columns A (serial number), B (case, in two parts, (i) and (ii)), C (specified date) and D (due date for payment of tax on accreted income).
Serial numbers 1 to 5 of the Table
| Serial number | Column B(i): case | Column B(ii) | Column C: specified date | Column D: due date |
|---|---|---|---|---|
| 1 | The registration granted to the specified person under any specified provision has been cancelled or withdrawn | The specified person has preferred an appeal against the order of cancellation | The date of the order cancelling the registration | Date of receipt of the order in any appeal, confirming the cancellation of the registration, by the specified person |
| 2 | The registration granted under any specified provision has been cancelled or withdrawn | The specified person has not preferred an appeal against such order of cancellation | The date of the order cancelling the registration | The date on which the period for filing appeal under section 362 against the order cancelling the registration expires |
| 3 | (a) The specified person has adopted or undertaken modification of its objects during any tax year; and (b) such modified objects do not conform to the conditions of registration | The specified person has not applied for fresh registration under any specified provision in such tax year | The date of adoption or modification of any object | The end of such tax year |
| 4 | (a) and (b) as in serial number 3 | The specified person has applied for fresh registration under any specified provision in such tax year and such application has been rejected and appeal has been preferred against such order of rejection | The date of adoption or modification of any object | The date of receipt of the order in any appeal, confirming the cancellation of the registration, by the specified person |
| 5 | (a) and (b) as in serial number 3 | The specified person has applied for fresh registration under any specified provision in the said tax year and such application has been rejected and no appeal has been preferred against such order of rejection | The date of adoption or modification of any object | The date on which the period for filing appeal under section 362 against the order cancelling the registration expires |
In the copy consulted the Table is cut by a page break inside serial numbers 4 and 5 and the header is repeated; the cells above are rebuilt from the lines on either side. For serial numbers 4 and 5, the column D wording ("confirming the cancellation of the registration" and "the order cancelling the registration") is as printed, although the case concerns rejection of an application for fresh registration. The Act does not explain this wording; read it as printed.
The Table names section 362. Under section 362(3) an appeal to the Appellate Tribunal is filed within two months from the end of the month in which the order is communicated; see our post on appeals to the Tribunal.
Worked example
Nirmal Shiksha Trust (an invented name) is a specified person. Its registration is cancelled by an order dated 10 June of a tax year, and it does not appeal (serial number 2). Suppose the period for filing an appeal under section 362 ends on 30 July. The date in column D is 30 July; the trust and its trustee must pay the tax on accreted income within fourteen days from that date, that is, by 13 August. (The dates are invented to show the counting; the Act prints the rule, not these dates.)
The accreted income is worked out as of the specified date, the date of the order cancelling the registration (10 June). Say the fair market value of its total assets on that date is Rs. 80,00,000, and its total liability is Rs. 30,00,000. Then A = B - C = Rs. 80,00,000 - Rs. 30,00,000 = Rs. 50,00,000. If accreted income attributable to specified assets and related liabilities is Rs. 10,00,000, the accreted income after the reduction in sub-section (3) is Rs. 40,00,000. The additional tax is that amount at the maximum marginal rate, which the Act does not print in this section.
Need help with accreted income questions?
If your trust or society faces cancellation, a change of objects or any of the cases in the Table, our team can help you understand the position under section 352. Please contact us through the page for 12A, 80G and CSR registration.
Key takeaways
- The charge is additional tax at the maximum marginal rate on accreted income of a specified person.
- Accreted income = fair market value of total assets less total liability on the specified date, less the amount attributable to specified assets and related liabilities.
- Both the specified person and its principal officer or trustee are liable to pay.
- Payment is due within fourteen days from the due date in column D of the Table.
- Serial numbers 1 to 5 deal with cancellation or withdrawal of registration, and with modified objects that do not conform to the conditions of registration.
Read next
- Section 352: remaining cases, payment and recovery
- Sections 351 and 353: specified and other violations
- Sections 354 and 354A: approval for donation deduction and merger
- Section 332: registration
Disclaimer: Based on the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026, as consulted on 2 October 2026. It explains the words of the Act only; the Income-tax Rules, 2026, notifications, circulars, later amendments and the way the tax authorities and courts apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.