CBDT notifies merger rules for registered non-profit organisations

In short: FPAC

FFacts

Notification No. 139/2026 dated 30th October, 2026 (G.S.R. 961(E)) brings in the Income-tax (Eighth Amendment) Rules, 2026, inserting rule 189A and Form No. 112A, effective from the date of publication in the Official Gazette.

PProvisions and law

Issued under section 533 read with sections 352(4) [Table: Sl. No. 8] and 354A of the Income-tax Act, 2025 (30 of 2025), amending the Income-tax Rules, 2026.

AAnalysis

A registered NPO under section 332 cannot merge with a provisionally registered one and vice versa, outstanding demand not under appeal must be nil, objects cannot be changed for five years from the end of the financial year of merger, all assets, liabilities and obligations pass to the merged entity, no benefit to related persons under section 337(1) [Table: Sl. No. 2], and both entities must get books audited by an accountant under section 515(3)(b) as on the merger date.

CConclusion

Trusts and NPOs planning a merger must meet rule 189A conditions and intimate the jurisdictional Principal Commissioner or Commissioner in Form No. 112A within one month from the end of the merger month.

What to do

1. InformationCheck registration status under section 332 of both entities, any outstanding demand, pending appeals, and prepare trust deeds, registration copies, board resolution, audited books and reasons for merger.
2. DiscussionDecide whether objects are same or similar and confirm the five year bar on amending objects and the no benefit to related persons condition can be met.
3. FormsFile Form No. 112A electronically under digital signature or electronic verification code within one month from the end of the month in which the merger takes effect.
4. DeliverablesAudited accounts as on the date of merger and filed intimation acknowledging transfer of all assets, liabilities and obligations to the merged NPO.

Steps follow IDFD: Information, Discussion, Forms, Deliverables.