Income Tax Act 2025 & Draft IT Rules 2026 for Charitable institutions - Part II

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 Session Layout – Session 2 
 
 Session 1 contd. 
 Cross walk of Sections and Forms from existing to new Act and Rules 
 Forms & Proceedings 
 How to begin being compliance ready 
 
 
 133(1)(b)(ii) – Deduction in respect of donations to certain funds, charitable institutions, etc. (erstwhile Section 80G) 
 133 (1)  – In computing total income of an assesse, there shall be deducted: 
 ( b ) 50% of sums paid as donation during the tax year to— 
 (ii) any fund or any institution to which this section applies, if:— 
 (A) it is established in India for a charitable purpose; and 
 (B) it is a registered non-profit organisation and approved under section 354; 
 All provisions of Section 80G are aligned with Section 133 – i.e. represented in money, cash not >2k, statement of donation verified as per risk mgt strategy 
   
 6. Approval for Purpose of Deduction under Section 133(1)(b)(ii) 
 
 354 – Application for approval for purpose of Section 133(1)(b)(ii)  – An R-NPO may make application for approval under 133(1)(b)(ii) subject to
 
 Not for benefit of particular religious caste/community 
 For charitable purpose and can incur upto 5% of income for religious purpose 
 Constitution instrument does not permit transfer of assets for other than charitable purpose 
 Maintains accounts for receipt and expenditure 
 Prepares donation (including correction) statement and furnishes to Dept 
 Furnishes donation certificate to donor 
 
 
 
 Table explaining cases, timeline for application by assesse and approval by Dept and period of validity of approval 
 Table for Various Approvals u/s 133(1)(b)(ii) 
 
 
 
 Sl. No. 
 Case 
 Time limit for furnishing application 
 Time limit for passing order 
 Validity of registration 
 
 
 
 
 1 
 Where the  activities of the applicant have not commenced 
 At any time during the tax year from which approval is sought. 
 One month  from the end of the month in which application is made. 
 Three tax years  commencing from the tax year in which such application is made. 
 
 
 2 
 Where the  activities of the applicant have commenced . 
 At any time during the tax year from which approval is sought. 
 Six months  from the end of the quarter in which application is made. 
 Five  tax years commencing from the tax year in which such application is made. 
 
 
 3 
 Where the applicant has  provisional approval and activities have commenced 
 Within six months  of the commencement of activities. 
 Six months  from the end of the quarter in which application is made. 
 Five  tax years commencing from the tax year in which such application is made. 
 
 
 4 
 Where the  provisional approval of the applicant is due to expire and activities have not commenced. 
 At least  six months  prior to the expiry of the provisional approval. 
 Six months  from the end of the quarter in which application is made. 
 Five  tax years following the tax year in which such application is made. 
 
 
 5 
 Where the period for  approval of a registered non-profit organisation is due to expire. 
 At least  six months  prior to the expiry of the said approval. 
 Six months  from the end of the quarter in which application is made. 
 Five  tax years following the tax year in which such application is made. 
 
 
 
 6. Approval for Deduction under Section 133(1)(b)(ii) (continued) 
 
 Application made to P/CIT for approval as per Table 
 For sl 2-5 in Table P/CIT call for information and pass order
 
 for approval if activities are genuine and it abides with any other laws 
 Reject and communicate 
 
 
 P/CIT only pass order for provisional approval 
 
 354A – merger of two RNPOs with same/similar objects fulfilling conditions (12AC of ITA 1961) to be tax neutral – Budget 2026 
   
 7. Interpretation 
 
 355 – Interpretation 
 
 (a) anonymous donation – voluntary contribution where name and address of donor not known 
 (b) approval – approval under 80G of IT Act 1961 or section 354 of ITA 2025 
 (c) Donation – any voluntary contribution received by RNPO 
 (d) "commercial activity" means any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity 
 (e) "registration" includes provisional registration, provisional approval or approval referred to in sections 10( 23C ) or 12AB(1) of the Income-tax Act, 1961 and under section 332, but shall not include approval under section 80G(5) of the said Act or section 354; 
 (f) "registered non-profit organisation" means any person having a valid registration under any specified provision and such registration has not been cancelled 
 (g) "related person" means any of the following persons:— 
 (i) the author or the founder of the registered non-profit organisation; 
 (ii) any person whose total contribution to such registered non-profit organisation, during the relevant tax year exceeds one lakh rupees, or, in aggregate up to the end of the relevant tax year exceeds ten lakh rupees, as the case may be; 
 (iii) where such author, founder or person is a Hindu undivided family, a member of the family; 
 (iv) any trustee or manager (by whatever name called) of the registered non-profit organisation; 
 (v) any relative of any persons referred to in sub-clause ( i ), ( iii ) or ( iv ); 
 (vi) any concern in which any of the persons referred to in sub-clauses ( i ), ( iii ) (iv) or ( v ) has a substantial interest (defined as 20%> voting right/profits) 
 (h) "value" means the value of any benefit or facility granted or provided free of cost or at concessional rate to any related person 
 (i) "specified person" means any person which is registered under any specified provision at any time since its incorporation or creation; 
 (j) "specified provision" means section 12A, 12AA or 12AB or section 10( 23C ) of the Income-tax Act, 1961 or section 332; 
 (k) "wholly for charitable or religious purposes" shall mean wholly for charitable purposes or wholly for religious purposes or wholly for charitable and religious purposes. 
 Navigator 
 
 Sections between ITA 1961 and 2025 
 Rules between ITR 1962 and ITR 2026 
 Forms between ITR 1962 and ITR 2026 
 
 FAQs also released by CBDT 
   
 TDS Provisions – Chapter XIX – Collection & Recovery of Tax 
 
 392 – TDS on Salary 
 393(l) – Tax to be deducted at source Table sl. No. 2(ii). Rent Table sl. No. 6. (i) Payment to contractors 393(4) Table sl no. 8 carriage of goods Table sl. No. 6. (iii) fee for professional and technical services Table sl. No 8(ii) – TDS on purchase of goods Table sl. No. 8(iv) – TDS for benefits/perquisites 
 393(2) – TDS for payment to non resident 
 394 – TCS – sale of tendu leaves – 5%, sale of timber or forest produce under forest lease – 2% 
 395 – Certificate – for nil/LTDC until validity 
 398 – Failure to deduct/collect and pay TDS/TCS 
 427 – Fee for late filing of TDS return (234E) 
 461 – Penalty for failure to furnish TDS returns (271H) 
 397(2) – Obligation to provide PAN (206AA) 
 135 – Application for allotment of TAN (49B) 
 397(3)(f) – limitation of 2 years from end of tax year only for TDS/TCS correction statements introduced. Correction statements from FY 2018-19 to 2023-24 (Q3) to be made by 31.3.2026 otherwise time barred 
 
 Forms – Form No. 168 – Form 26AS and AIS merged Form No. 138 – Form 24Q Form No. 140 – Form 26Q Form No. 144 – Form 27Q 
   
 Misc Provisions 
 
 Section 186 – Mode of undertaking transaction – (erstwhile 269ST) – Receive Rs.2 lakhs or more from a person in a day/single transaction/transactions for single event/occasion in cash otherwise equivalent amount of penalty as per Section 451 
 Section 37 – Certain deductions allowed on actual payment basis only – erstwhile Section 43(B)(h) – effective April 2023 requires all payers for timely payments (15-45 days) to registered MSMEs to claim deductions in the same financial year 
 
   
 Cross Walk of Sections – Income-tax Act 1961 to Income-tax Act 2025 
 
 
 
 Section Number of Income-tax Act, 1961 
 Section heading 
 Section Number of Income-tax Act, 2025 
 
 
 
 
 2(15)(Proviso) 
 Definitions. 
 346 
 
 
 10(23C)(iiiab) 
 Any University or other educational institution wholly or substantially financed by the Govt 
 Schedule VII (Table: S. No. 17) 
 
 
 10(23C)(iiiac) 
 Any hospital or other institution wholly or substantially financed by the Government. 
 Schedule VII (Table: S. No. 18) 
 
 
 10(23C)(iiiad) 10(23C)(iiiae) 
 (a) Any University or other educational institution; (b) any hospital or other institution. 
 Schedule VII (Table: S. No. 19) 
 
 
 10(46) 
 Any income of the nature and to the extent which the Central Government may, by notification, 
 Schedule III (Table: S. No. 36) 
 
 
 11(1)(a) 
 Income from property held for charitable or religious purposes. 
 336 
 
 
 11(1)(b) 
 Income from property held for charitable or religious purposes. 
 336 
 
 
 11(1)(c) 
 Income from property held for charitable or religious purposes. 
 338(a) 
 
 
 11(1)(d) 
 Income from property held for charitable or religious purposes. 
 338(b) 
 
 
 11(1)(d) 
 Income from property held for charitable or religious purposes. 
 339 
 
 
 11(1)(Explanation)(1)(1) 
 Income from property held for charitable or religious purposes. 
 335(c) 
 
 
 11(1)(Explanation)(1)(2) 
 Income from property held for charitable or religious purposes. 
 Omitted 
 
 
 11(1)(Explanation)(2) 
 Income from property held for charitable or religious purposes. 
 341(1)(c) 
 
 
 11(1)(Explanation)(3) 
 Income from property held for charitable or religious purposes. 
 341(1)(a)(iii) 
 
 
 11(1)(Explanation)(3A) 
 Income from property held for charitable or religious purposes. 
 340 
 
 
 11(1)(Explanation)(3B) 
 Income from property held for charitable or religious purposes. 
 337 (Table: S. No. 5) 
 
 
 11(1)(Explanation)(4)(i) 
 Income from property held for charitable or religious purposes. 
 341(4) 
 
 
 11(1)(Explanation)(4)(i) (Proviso) 
 Income from property held for charitable or religious purposes. 
 341(2)(a) 
 
 
 11(1)(Explanation)(4)(ii) 
 Income from property held for charitable or religious purposes. 
 341(4) 
 
 
 11(1)(Explanation)(4)(ii) (Proviso) 
 Income from property held for charitable or religious purposes. 
 341(2)(b) 
 
 
 11(1)(Explanation)(4)(iii) 
 Income from property held for charitable or religious purposes. 
 341(1)(b) 
 
 
 11(1)(Explanation)(5) 
 Income from property held for charitable or religious purposes. 
 341(3)(b) 
 
 
 11(1A) 
 Income from property held for charitable or religious purposes. 
 Omitted 
 
 
 11(1B) 
 Income from property held for charitable or religious purposes. 
 Omitted 
 
 
 11(2)((a) 
 Income from property held for charitable or religious purposes. 
 342(1) 
 
 
 11(2)(b) 
 Income from property held for charitable or religious purposes. 
 342(4) 
 
 
 11(2)(c) 
 Income from property held for charitable or religious purposes. 
 342(1) 
 
 
 11(2)(Proviso) 
 Income from property held for charitable or religious purposes. 
 342(3) 
 
 
 11(2)(Explanation) 
 Income from property held for charitable or religious purposes. 
 342(2) 
 
 
 11(3)(a) 
 Income from property held for charitable or religious purposes. 
 337 (Table: S. No. 6) 
 
 
 11(3)(b) 
 Income from property held for charitable or religious purposes. 
 337 (Table: S. No. 4) 
 
 
 11(3)(c) 
 Income from property held for charitable or religious purposes. 
 337 (Table: S. No. 8) 
 
 
 11(3)(d) 
 Income from property held for charitable or religious purposes. 
 337 (Table: S. No. 9) 
 
 
 11(3A) 
 Income from property held for charitable or religious purposes. 
 342(5) 
 
 
 11(3A) 
 Income from property held for charitable or religious purposes. 
 342(6) 
 
 
 11(3A)(1st Proviso) 
 Income from property held for charitable or religious purposes. 
 342(2) 
 
 
 11(3A)(2nd Proviso) 
 Income from property held for charitable or religious purposes. 
 342(7) 
 
 
 11(4) 
 Income from property held for charitable or religious purposes. 
 344 
 
 
 11(4A) 
 Income from property held for charitable or religious purposes. 
 345 
 
 
 11(5) 
 Income from property held for charitable or religious purposes. 
 350 
 
 
 11(6) 
 Income from property held for charitable or religious purposes. 
 341(3)(a) 
 
 
 11(7) 
 Income from property held for charitable or religious purposes. 
 333 
 
 
 11(Explanation) 
 Income from property held for charitable or religious purposes. 
 341(1)(a)(i) 
 
 
 12(1) 
 Income of trusts or institutions from contributions. 
 335(c) 
 
 
 12(2) 
 Income of trusts or institutions from contributions. 
 337 (Table: S. No. 2) 
 
 
 12(3) 
 Income of trusts or institutions from contributions. 
 Redundant 
 
 
 12A(1)(ac) 
 Conditions for applicability of sections 11 and 12. 
 332(3) 
 
 
 12A(1)(ac)(Proviso) 
 Conditions for applicability of sections 11 and 12. 
 332(4) 
 
 
 12A(1)(ac)(Proviso) 
 Conditions for applicability of sections 11 and 12. 
 332(9) 
 
 
 12A(1)(b) 
 Conditions for applicability of sections 11 and 12. 
 347 
 
 
 12A(1)(b) 
 Conditions for applicability of sections 11 and 12. 
 348 
 
 
 12A(1)(ba) 
 Conditions for applicability of sections 11 and 12. 
 349 
 
 
 12A(2) 
 Conditions for applicability of sections 11 and 12. 
 332(3) 
 
 
 12AA 
 Procedure for registration. 
 Omitted 
 
 
 12AB(1) 
 Procedure for fresh registration. 
 332(7) 
 
 
 12AB(2) 
 Procedure for fresh registration. 
 Redundant 
 
 
 12AB(3) 
 Procedure for fresh registration. 
 332(3) 
 
 
 12AB(4) 
 Procedure for fresh registration. 
 351(2) 
 
 
 12AB(4)(Explanation) 
 Procedure for fresh registration. 
 351(1) 
 
 
 12AB(5) 
 Procedure for fresh registration. 
 351(3) 
 
 
 12AC 
 Merger of charitable trusts or institutions in certain cases. 
 352(5) (Table: Sl. No. 8.B) 
 
 
 13(1)(a) 
 Section 11 not to apply in certain case. 
 351(1)(c) 
 
 
 13(1)(b) 
 Section 11 not to apply in certain case. 
 351(1)(d) 
 
 
 13(1)(c) 
 Section 11 not to apply in certain case. 
 337 (Table: S. No. 2) 
 
 
 13(1)(d) 
 Section 11 not to apply in certain case. 
 350 
 
 
 13(10) 
 Section 11 not to apply in certain case. 
 353 
 
 
 13(11) 
 Section 11 not to apply in certain case. 
 353 
 
 
 13(2) 
 Section 11 not to apply in certain case. 
 337 (Table: S. No. 2) 
 
 
 13(3) 
 Section 11 not to apply in certain case. 
 355(j) 
 
 
 13(4) 
 Section 11 not to apply in certain case. 
 Redundant 
 
 
 13(5) 
 Section 11 not to apply in certain case. 
 Redundant 
 
 
 13(6) 
 Section 11 not to apply in certain case. 
 Redundant 
 
 
 13(7) 
 Section 11 not to apply in certain case. 
 Redundant 
 
 
 13(8) 
 Section 11 not to apply in certain case. 
 346 
 
 
 13(9) 
 Section 11 not to apply in certain case. 
 342(1) 
 
 
 13 Explanation (1) 
 Section 11 not to apply in certain case. 
 355(i) 
 
 
 13 Explanation (2) 
 Section 11 not to apply in certain case. 
 351(1)(d) 
 
 
 35 
 Expenditure on scientific research. 
 45 
 
 
 40A 
 Expenses or payments not deductible in certain circumstances. 
 29, 32, 36 
 
 
 80G 
 Deduction in respect of donations to certain funds, charitable institutions, etc. 
 133 
 
 
 80G(5) 
 Deduction in respect of donations to certain funds, charitable institutions, etc. 
 354(1) 
 
 
 80G(5)(Proviso) 
 Deduction in respect of donations to certain funds, charitable institutions, etc. 
 354(2) 
 
 
 80GGA 
 Deduction in respect of certain donations for scientific research or rural development. 
 135 
 
 
 80GGB 
 Deduction in respect of contributions given by companies to political parties. 
 136 
 
 
 115BBC 
 Anonymous donations to be taxed in certain cases. 
 337 (Table: S. No. 1) 
 
 
 115BBI 
 Specified income of certain institutions. 
 337 
 
 
 115TD 
 Tax on accreted income. 
 352 
 
 
 115TE 
 Interest payable for non payment of tax by specified person 
 352 
 
 
 139 
 Return of Income 
 263 
 
 
 142 
 Inquiry before assessment 
 268 
 
 
 143 
 Assessment 
 270 
 
 
 148 
 Issue of notice where income has escaped assessment 
 280 
 
 
 154 
 Rectification of mistake 
 287 
 
 
 156 
 Notice of demand. 
 289 
 
 
 192 
 Salary TDS 
 392 
 
 
 194C 
 Payments to contractors. 
 393(1) [Table: S.No. 6(i)], 393(4) [Table: S.No. 8] 
 
 
 194I 
 Rent. 
 393(1) [Table: S.No. 2(i) & 2(ii)], 393(4) [Table: S.No. 2] 
 
 
 194-IA 
 Payment on transfer of certain immovable property other than agricultural land. 
 393(1) [Table: S.No. 3(i)] 
 
 
 194-IB 
 Payment of rent by certain individuals or Hindu undivided family. 
 393(3) [Table: S.No. 2(ii)] 
 
 
 194-IC 
 Payment under specified agreement. 
 393(1) [Table: S.No. 3(ii)] 
 
 
 194J 
 Fees for professional or technical services. 
 393(1) [Table: S.No. 6(iii)], 393(4) [Table: S.No. 9] 
 
 
 194Q 
 Deduction of tax at source on payment of certain sum for purchase of goods. 
 393(1) [Table: S.No. 8(ii)] 
 
 
 194R 
 Deduction of tax on benefit of perquisite in respect of business or profession. 
 393(1) [Table: S.No. 8(iv)] 
 
 
 195 
 Other sums. 
 393(2) [Table: S.No. 17] 
 
 
 197 
 Certificate for deduction at lower rate. 
 395(1) 
 
 
 206AA 
 Requirement to furnish Permanent Account Number. 
 397(2) 
 
 
 206CC 
 Requirement to furnish Permanent Account Number by collectee. 
 397(2) 
 
 
 206CCA 
 Special provision for collection of tax at source for non-filers of income tax return 
 Omitted 
 
 
 234E 
 Fee for default in furnishing statements. 
 427 
 
 
 245 
 Set off and withholding of refunds in certain cases. 
 438 
 
 
 269ST 
 Mode of undertaking transactions. 
 186 
 
 
 270A 
 Penalty for under-reporting and misreporting of income. 
 439 
 
 
 271H 
 Penalty for failure to furnish statements, etc. 
 461 
 
 
 
 
 Forms and Proceedings 
 Forms – 
 
 Audit Report – 10B/10BB – Single form 112 
 ITR 7 continues as such for now 
 9A (deemed application) – now Form no 108 – application in case of dissolution 
 10 – now Form no 109 – Accumulation 
 10BD – now Form no 113 
 10BE – now Form no 114 
 
 Proceedings – 
 
 Section 139 – Return of Income now Section 263 
 Section 142 – Notice by AO for inquiry before assessment now Section 268 
 Section 143 – Assessment now Section 370 
 Section 149 – Notice when income escaped assessment now Section 280 
 Section 154 – Rectification of mistake by AO now Section 287 
 Section 156 – Demand notice now Section 289 
 Section 270A – Mis/underreporting penalty now Section 439 
 
 Cross Walk of Forms – IT Rules 1962 to IT Rules 2026 
 
 
 
 Form No. (IT Rules 2026) 
 Form No. (IT Rules 1962) 
 Description 
 
 
 
 
 16 
 New Form 
 Certificate of donation under section 45(4)(a) of the Act 
 
 
 93 
 49A 
 Application for allotment of PAN (For an individual being Citizen of India) 
 
 
 104 
 10A 
 Application for provisional registration or provisional approval 
 
 
 105 
 10AB 
 Application for registration of non-profit organisation under section 332 or approval for deduction under section 133(1)(b)(ii) 
 
 
 106 
 10AC 
 Order for provisional registration u/s 332 or provisional approval u/s 354 Rejection of application 
 
 
 107 
 10AD 
 Order for grant of registration under section 332 or approval under section 354 or rejection of application or cancellation of registration or approval granted 
 
 
 108 
 9A 
 Exercise of option under section 341(7) in respect of amount applied for charitable purpose in case of dissolution 
 
 
 109 
 10 
 Accumulation 
 
 
 113 
 10BD 
 Statement of donation 
 
 
 114 
 10BE 
 Certificate of donation under section 354(1)(g) of the Act 
 
 
 138 
 24Q 
 Quarterly statement of deduction of tax under section 397(3)(b) of the Act in respect of salary paid to employee under section 392 
 
 
 140 
 26Q 
 Quarterly statement of deduction of tax under section 397(3)(b) of the Act in respect of payments made other than salary for the quarter ended (June/September/December/March) 
 
 
 144 
 27Q 
 Quarterly statement of deduction of tax under section 397(3)(b) of the Act in respect of payments other than salary made to non-residents for quarter 
 
 
 145 
 15CA 
 Information to be furnished for payments to a non-resident not being a company, or to a foreign company 
 
 
 146 
 15CB 
 Certificate 
 
 
 168 
 26AS 
 Annual information statement 
 
 
 
 
 Key Takeaways for NGOs 
 
 Neat structuring of provisions, unified definitions for common interpretation, tables/Schedules to make comprehension easy 
 Person who can be RNPO specified 
 No new tax 
 Existing registration/approval of RNPO under ITA 1961 valid 
 Deemed application provision for shortfall in 85% utilization remains. 
 Repurposing of accumulated income permitted 
 15% income set apart (deemed accumulated income) to be put in specified modes of investment 
 Commercial activity prohibited for all objects except GPU. Other than GPU, only incidental business income permitted 
 
 How to be Compliance Ready 
 
 Compliance to begin from tax year 2026-27. Now is the time for unlearning-learning 
 Existing registrations if valid need no further action 
 Finance & Compliance teams of NGOs need to understand the structure and navigate flow from ITA 1961 to ITA 2025 
 Familiarity with definitions, sections, tables, Schedules, forms, rules required in the long future 
 Be aware of specified violations under 351 as per sub part 6 to avoid cancellation 
 Tax on accreted income provisions maybe applied more rigorously 
 Refer to tables for registration under 332, approval under 354, accreted tax under 352 and Specified income under 337 
 Property irrevocably in trust for benefit of general public maybe included as a must in constitution documents.