Income Tax:
CBDT Ministry of Finance, vide Notification No. 961(E) dated October 30, 2026, has issued the Income-tax (Eighth Amendment) Rules, 2026, amending the Income-tax Rules, 2026, by inserting a new Rule 189A prescribing conditions for the merger of registered non-profit organisations for the purposes of Section 352(4) [Table: Sl. No. 8] and Section 354A of the Income-tax Act, 2025.
The newly inserted Rule 189A prescribes the following conditions for the merger of registered non-profit organisations having the same or similar objects:
- A registered non-profit organisation cannot merge with a provisionally registered organisation, and vice versa.
- There should be no outstanding tax, interest, penalty, fine or other dues arising from an order under the Act, unless the demand is under appeal. Where an appeal is pending, the outstanding demand shall be payable by the merged organisation upon finalisation of the appeal.
- The objects of the merged organisation shall not be amended for five years from the end of the financial year in which the merger takes place.
- All assets and liabilities of the merging organisation shall vest in the merged organisation from the date of merger.
- The merger should not result in any direct or indirect benefit to specified related persons.
- The merged organisation shall comply with the applicable provisions relating to application of income, accumulation of income, taxation of specified income, investment of funds and payment of additional income-tax, wherever applicable.
- The merged organisation shall intimate the jurisdictional Principal Commissioner/Commissioner of Income-tax in Form No. 112A within one month from the end of the month in which the merger takes effect.
- Existing assessment, reassessment and other proceedings against the merging organisation shall be continued against the merged organisation, subject to the specific treatment prescribed under the Rules.
- The books of account of both organisations shall be audited by an accountant as on the date of merger.
Further, the notification introduces Form No. 112A – Intimation for Merger of Registered Non-Profit Organisations, requiring details of both the merging and merged organisations, including PAN, registered address, contact details and effective date of merger. Supporting documents, including trust deeds, registration certificates, merger resolutions, audited financial statements and reasons for merger, are also required to be furnished as annexures.
The prescribed form shall be furnished electronically under digital signature or through an Electronic Verification Code (EVC).
[Notification No. 961(E) dated October 30, 2026]
