CBDT notification 139/2026, dated 30 October 2026, adds rule 189A to the Income-tax Rules, 2026. It sets conditions for merging a registered non-profit organisation into another with the same or similar objects. The merged organisation files Form 112A with the jurisdictional Principal Commissioner or Commissioner within one month from the end of the month the merger takes effect.
Riverbend Education Trust and Greenfield Education Society both run schools and both are registered under section 332. They decide to merge, with Riverbend merging into Greenfield. The merger takes effect on 10 March 2027.
| Who is who | Riverbend is the “merging” organisation. Greenfield is the “merged” organisation, the one that carries on. |
|---|---|
| Filing deadline | The month of merger ends on 31 March 2027. One month from that date is 30 April 2027. Greenfield files Form 112A by then. |
| Objects locked | The financial year of the merger ends on 31 March 2027. Greenfield cannot amend its objects for five years from that date, that is until 31 March 2032. |
What is a registered non-profit organisation under the Income-tax Act, 2025?
The notification is made under the Income-tax Act, 2025 (Act 30 of 2025) and amends the Income-tax Rules, 2026. The notification uses the term registered non-profit organisation for a non-profit that holds registration under section 332 of the Act (the notification does not define the term, so check the Act). Registration comes in two forms, and the notification names both. An organisation is registered under section 332, or it is provisionally registered under section 332.
Why does a merger matter for tax? The notification points to several conditions in the Act that a registered non-profit follows. Income has to be applied as section 341 requires. Accumulated income is dealt with under section 342. Section 334 applies to tax on specified income, which the notification mentions without defining, so check the Act for the meaning. Funds must be invested in the modes of section 350, and section 352 applies to additional income-tax whenever that liability arises. Form 112A is how the merger is intimated to the jurisdictional Principal Commissioner or Commissioner.
What do rule 189A and Form 112A add?
In force on Gazette publication. Rule 189A (after rule 189 of the Income-tax Rules, 2026) lists the merger conditions. Form No. 112A (Appendix III, after Form 112) is how the merged organisation tells the jurisdictional Principal Commissioner or Commissioner.
THE MERGER MUST NOT
Pair a registered organisation with a provisionally registered one, or leave an outstanding demand not in appeal. Give any direct or indirect benefit to a related person (as referred to in section 337(1) [Table: Sl. No. 2]) of either organisation. Amend the merged organisation’s objects within five years from the end of the financial year of the merger.
THE MERGED ORGANISATION MUST
Take over all assets, liabilities and obligations of the merging one from the date of the merger. File Form 112A on time. Pay any pending demand once an appeal attains finality. Have the books of both organisations audited by an accountant defined in section 515(3)(b) as on the date of merger.
Which mergers does the rule allow?
| Merging organisation | Into a registered organisation | Into a provisionally registered organisation |
|---|---|---|
| Registered under section 332 | Allowed (if all conditions met) | Barred by clause (a) |
| Provisionally registered under section 332 | Barred by clause (b) | Allowed (if all conditions met) |
What obligations does the merged organisation inherit?
Clause (h) makes all obligations of the merging organisation those of the merged one. These include application of income (section 341) and accumulated income (section 342), tax under section 334 on its specified income, the section 340 conditions, investment in the modes of section 350, and additional income-tax under section 352.
Under clauses (j) and (k), assessments and other proceedings on the merging organisation are deemed made on, or are made on, the merged organisation. Treat the merged organisation as the party to any open assessment of the merging one.
What does Form 112A ask for?
Part A records the merging organisation (name, address, PAN, e-mail, contact, date of merger). Part B records the merged organisation, with further details as enclosures. The declaration states that a resolution of the trustees, governing body or management decided the merger, then gives undertakings that repeat the rule. The form adds three: no depreciation claim where the cost was already claimed as application by the merging organisation; contributions to the merging organisation count towards the merged one’s total for section 355(h)(ii); and section 340 conditions must not be violated, not even by the merging organisation.
The form needs five annexures. Plan for them in advance, as A-4 needs accounts as on the date of merger.
| Annexure | What to attach |
|---|---|
| A-1 | Copy of the trust deeds of both organisations |
| A-2 | Copy of the registration granted to both |
| A-3 | Copy of the resolution of the trustees, governing body or management highlighting the merger details |
| A-4 | Audited books of accounts of both, as on the date of merger and for the financial year immediately before the tax year in which the merger took place |
| A-5 | Reasons for undertaking the merger |
Who is affected and what should they do?
Trustees
Check both registration statuses first.
Finance teams
Diarise the deadline; prepare A-1 to A-5.
Points to watch: the rule does not itself define “same or similar objects”, so record in the resolution how the objects line up.
Legal basis
- Power used
- Section 533 read with sections 352(4) (Table, Sl. No. 8) and 354A of the Income-tax Act, 2025 (30 of 2025)
- Instrument
- Income-tax (Eighth Amendment) Rules, 2026, G.S.R. 961(E), Notification No. 139/2026, F. No. 370142/32/2026-TPL, 30 October 2026
- Amends
- Income-tax Rules, 2026: new rule 189A after rule 189, and new Form No. 112A in Appendix III after Form No. 112
- Published in
- Gazette of India, Extraordinary, Part II, Section 3(i)
Key facts
| Authority | Central Board of Direct Taxes (CBDT), Ministry of Finance |
|---|---|
| Reference | G.S.R. 961(E); Notification No. 139/2026 |
| Issue date | 30 October 2026 |
| Effective date | On publication in the Official Gazette (notification dated 30 October 2026) |
| Filing deadline | One month from the end of the month in which the merger comes into effect |
| Verification | Checked against the Gazette text of the notification (Income Tax Department e-filing portal copy) and the Act sections on the Income Tax Department website, 3 November 2026 |
Frequently asked questions
Can a trust that is fully registered merge with one that is only provisionally registered?
No. Clauses (a) and (b) of rule 189A(1) bar a non-profit registered under section 332 from merging with one provisionally registered under section 332, and the other way round. Same-status pairings with the same or similar objects are the ones the rule allows.
Does the merged organisation inherit the other organisation’s accumulated income obligations?
Yes. All obligations of the merging organisation become those of the merged one, including application of accumulated income as per section 342.
Who signs Form 112A and how is it filed?
The declaration is made on behalf of the merged organisation by a named signatory with a designation. Rule 189A(2) says the form is furnished electronically, either under digital signature or with an electronic verification code.
What if the merging organisation has an unpaid tax demand?
Under clause (c) there must be no outstanding demand that is not in appeal. Under clause (d), if an appeal is pending, the merged organisation pays the demand once the appeal attains finality.
Sources (official)
- Income-tax (Eighth Amendment) Rules, 2026, G.S.R. 961(E), Notification No. 139/2026, 30 October 2026, The Gazette of India, Extraordinary, Part II, Section 3(i), pages 6 to 9. Text read in full from the Gazette copy published on the Income Tax Department e-filing portal.https://www.incometax.gov.in/iec/foportal/sites/default/files/2026-10/Notification-No-139-2026.pdf
- Income-tax Act, 2025 (30 of 2025), sections cited in the notification. Links go to the section text (as amended) on the Income Tax Department website. Section numbers are taken from the notification text.
- Section 332: Application for registration
- Section 334: Tax on income of registered non-profit organisation
- Section 337: Specified income
- Section 340: Deemed corpus donation
- Section 341: Application of income
- Section 342: Accumulated income
- Section 350: Permitted modes of investment
- Section 352: Tax on accreted income
- Section 354A: Merger of registered non-profit organisation in certain cases
- Section 355: Interpretation
- Section 515: Appearance by authorised representative
- Section 533: Power to make rules
- India
- CBDT
- Direct Tax
- Registered non-profit
- Rule 189A
- Form 112A
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