Consequences of conversion of a non-profit organisation
94. (1) A non-profit organisation shall be liable to income tax at the rate of thirty per cent. in respect of its net worth if,-
(a) it converts into any form of organisation which does not qualify as a nonprofit organisation; or
(b) it ceases to be a non-profit organisation in the financial year and any two financial years out of four financial years immediately preceeding the relevant financial year;
(c) fails to transfer, upon its dissolution, all its assets to any other non-profit organisation.
(2) For the purposes of this section,-
(a) net worth shall be computed as on,-
(i) the date of conversion of the non-profit organisation in a case falling under clause (a) of sub-section (1);and
(ii) the last day of the financial year in a case falling under clause (b) of subsection (1);
(b) net worth means the aggregate value of the total assets of the non-profit organisation as reduced by the value of liabilities of the organisation;
(c) the value of the total assets and liabilities shall be computed in accordance with the rules of valuation prescribed in this behalf.
