Rule 183 lists ten circumstances in which income of a registered non-profit organisation is treated as applied for the benefit of a related person — lending without security or interest, free use of property, excess salary, goods or services below adequate consideration, purchases and sales at inadequate prices, diversion of income or property above Rs. 1,000, and investment in a concern where a related person has a substantial interest — and fixes the amount as the value of the benefit.
183
Rules 2026 · Rule 183
Manner of computation of any portion of income applied by a registered non-profit organisation, directly or indirectly, for benefit of any related person
Rules 131-200
The circumstances (sub-rule 1). During the tax year: (a) income or property is lent to a related person without adequate security; (b) or without adequate interest; (c) land, building or other property is made available for use without adequate rent or compensation; (d) salary, allowance or other payment to a related person for services exceeds what may reasonably be paid; (e) services or goods are made available without adequate consideration; (f) a share, security or other property is bought from a related person for more than adequate consideration; (g) it is sold to a related person for less than adequate consideration; (h) income exceeding Rs. 1,000 in aggregate is diverted to a related person; (i) property exceeding Rs. 1,000 in value is diverted; or (j) funds are, or remain, invested for any period (not before 1 January 1971) in a concern in which a related person has a substantial interest.
Amount (sub-rule 2). The income so treated is the value of any benefit or facility granted or provided free or at a concessional rate to the related person.
Definition (sub-rule 3). "Related person" has the meaning in section 355(h).