Summary: The Income Tax Department has introduced online Form No. 188 for obtaining approval of Gratuity Funds and Superannuation Funds through the Income Tax e-Filing Portal from Tax Year 2026-27 onwards. The form replaces the earlier text-based offline procedures under Rules 95 and 109 for new approvals, while the old offline mechanism will continue for prior tax years up to 2025-26. Form 188 must be filed by trustees having an active PAN, portal registration, completed profile, and digital signature. The form captures employer details, fund information, employee categories, corpus, and investment details, along with mandatory attachments such as trust deeds, fund rules, balance sheets, and supporting documents. After online filing and e-verification, the jurisdictional tax authority may approve, issue deficiency notices, or reject the application. Approval is crucial because employer contributions to approved funds qualify for deductions under Sections 36(1)(iv) and 36(1)(v), and the income of approved funds remains tax exempt.
1. Background
The Income Tax Department has introduced Form No. 188 for seeking approval of a Gratuity Fund or Superannuation Fund. The entire process is now online through the Income Tax e-Filing Portal.
This form is applicable from Tax Year 2026-27 onwards. For approvals relating to prior years (up to Tax Year 2025-26), the earlier offline process continues to apply.
2. Who Should File
Form No. 188 must be filed by the trustee. The applicant must:
- Be a registered user on the e-Filing portal
- Have an active PAN
- Have completed the ‘My Profile’ section on the portal
- Digital Signature of the Trustee
3. When to File
It is required only when seeking initial approval for a new Gratuity Fund or Superannuation Fund. Once a fund is approved, the approval continues for subsequent years.
4. Structure of the Form
The form has four sections on the portal:
- Part A – Details of the employer (name, PAN, address, nature of business)
- Part B – Details of the fund: name, PAN, date of creation, type, employee classes, place of accounts maintenance, corpus and investment pattern
- Annexure – Upload of supporting documents
- Form of Verification – Declaration by the trustee, followed by e-Verification
5. Documents to be Attached
The following documents are required:
- Trust Deed constituting the Fund
- Fund Rules governing its administration
- Balance Sheet as on 31st March of the financial year preceding the date of application – required if the fund is already in existence
- Verification form
- Lis of offices
- Other supporting documents Like nominee proforma, details of the trustees and other relevant documents.
6. How to File – Step by Step
1. Log in to the e-Filing portal using the Trust’s PAN and password.
2. Click on ‘Forms as per Income Tax Act, 2025’, select ‘Form No. 188’, and click ‘File Now’.
3. Select Tax Year and click ‘Continue’
4. Fill Part A (employer details). The form may be partly pre-filled.
5. Fill Part B (fund details, employee classes, corpus and investment details). Up to 50 employee records can be added
6. Upload all required documents in the Attachments panel & fill the Verification panel.
7. Once all four panels show ‘Completed’, click ‘Preview’ to review the entries. If any correction is needed, use the ‘Edit’ option. A pre-filing PDF can be downloaded for reference, but this is not the final filed form.
8. Click ‘Proceed to E-Verify’. Verify using DSC, EVC, or OTP.
9. On successful submission, a Transaction ID and Acknowledgement Receipt Number (ARN) will be generated. Download the acknowledgement for records.
7. What Happens After Filing
The jurisdictional Pr. CCIT / CCIT / PCIT / CIT will examine the application. The possible outcomes are:
- Approval – Certificate of Approval is granted. The fund becomes eligible for tax benefits under the Income-tax Act.
- Deficiency Notice – Issued if documents are incomplete or clarification is needed.
- Rejection – If the conditions under Schedule XI of the Income-tax Act are not met.
8. Why Approval Matters – Tax Benefits
Obtaining approval under Form No. 188 is important for the following reasons:
- Employer contributions to an approved Gratuity Fund are deductible under Section 36(1)(v).
- Employer contributions to an approved Superannuation Fund are deductible under Section 36(1)(iv).
- Income of the approved fund is exempt from tax.
Without approval, these deductions are not available.
9. Frequently Asked Questions
Q.1 From which tax year is Form No. 188 applicable?
Ans. Form No. 188 is applicable from Tax Year 2026-27. The portal does not allow filing for tax years prior to 2026-27.
Q.2 Can Form No. 188 be filed for Tax Year 2024-25 or 2025-26?
Ans. No. The e-Filing portal does not permit selection of tax years prior to 2026-27 for this form. For approvals relating to those years, the earlier offline process under Rule 95 (Gratuity Fund) and Rule 109 (Superannuation Fund) of the Income-tax Rules applies.
Q.3 Does this form need to be filed every year?
Ans. No. It is a one-time filing required only at the time of seeking initial approval. Once approved, the approval continues for subsequent years. Re-filing is needed only if a fresh approval is being sought for a new fund.
Q.4 Is Form No. 188 applicable to both Gratuity and Superannuation Funds?
Ans. Yes. A single consolidated Form No. 188 cover both. Earlier, Rule 95 and Rule 109 had separate text-based requirements. Since the procedures were identical, one common form has been introduced.
Q.5 Can an individual employee file this form?
Ans. No. Only the trustee(s) of the fund or an authorised person acting on behalf of the Trust can file Form No. 188.
Q.6 What if the fund is already operational?
Ans. If the fund is already functional, copies of the fund’s accounts for previous years and the Balance Sheet as on 31st March of the preceding financial year must be attached. These are mandatory for existing funds.
Q.7 What happens if approval is not obtained?
Ans. Without approval, the employer cannot claim deductions for contributions made to the Superannuation and Gratuity Fund under Sections 36(1)(iv) and 36(1)(v). The fund’s income may also become taxable.
10. Conclusion
Form No. 188 replaces the old text-based requirements under Rules 95 and 109 with a online process, applicable from Tax Year 2026-27. For prior year approvals, the old offline process continues to apply. Trustees of Gratuity and Superannuation Funds seeking initial approval from Tax Year 2026-27 onwards should file this form through the Income Tax e-Filing Portal.
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