Draft Income Tax Rule 290 , 291 , 292 – Audit Reports under Schedules IX & X (Sections 48 & 49) and Investment of Fund Moneys
Rules 290, 291, and 292 of the Draft Income-tax Rules, 2026 outline compliance requirements relating to audit reporting and investment of provident fund monies. Rule 290 mandates that the audit report of accounts required under paragraph 2 of Schedule IX read with section 48 of the Act must be furnished in Form No. 182, while Rule 291 requires that the audit report under paragraph 2 of Schedule X read with section 49 of the Act be furnished in Form No. 183. Rule 292 prescribes the investment pattern for provident fund contributions, including amounts contributed by employers or employees, transfers from recognized provident funds maintained by former employers, and income accrued by way of interest or otherwise. These funds must be invested in specified categories with defined allocation limits: a minimum of 45% in government securities and related investments, minimum 35% in debt instruments and related investments, up to 5% in short-term debt instruments, minimum 5% in equities and related investments, and up to 5% in asset-backed, trust-structured, or miscellaneous investments. The nature and conditions of such investments are to follow the framework specified in the notification issued by the Ministry of Labour and Employment dated 29 March 2015, as amended from time to time. Funds not invested according to this pattern may be temporarily deposited in a Post Office Savings Bank Account or in current or savings accounts with scheduled banks. The rule further clarifies that the investment pattern applies to the aggregate fund balance during the tax year and defines key terms such as government securities and scheduled banks while specifying that funds realized from securities, deposits, or bank withdrawals will be treated as monies accruing to the fund.
Extract of Rule No. 290, 291, 292 of Draft Income-tax Rules, 2026
Rule 290
Report of audit of accounts to be furnished under Schedule IX r. w. section 48 of the Act
The report of audit of the accounts of an assessee, which is required to be furnished under paragraph 2 of Schedule IX r. w. section 48 of the Act shall be in Form No. 182.
Rule 291
Report of audit of accounts to be furnished under Schedule X r. w. section 49 of the Act
The report of audit of the accounts of an assessee, which is required to be furnished under paragraph 2 of Schedule X r. w. section 49 of the Act, shall be in Form No. 183.
Rule 292
Investment of fund moneys.
(1) All contributions to a provident fund, whether made by the employer or the employees, or transferred from an employee’s individual account in a recognized provident fund maintained by a former employer, or accrued as interest or otherwise shall be invested in the instruments given in column
(2) of the following table subject to the percentages given in column (3) of the said table, namely:—
TABLE
INVESTMENT PATTERN
| Sl. No. | Investment | Percentage amount to be invested in items referred to in column (2) |
| (1) | (2) | (3) |
| (i) | Government Securities and Related Investments: | Minimum forty-five per cent |
| (ii) | Debt Instruments and Related Investments: | Minimum thirty-five per cent |
| (iii) | Short-term Debt Instruments and Related Investments | Upto five per cent |
| (iv) | Equities and Related Investments | Minimum five per cent |
| (v) | Asset Backed, Trust Structured and Miscellaneous Investments | Upto five per cent |
(2) The nature of investments referred to in sub-rule (1) shall take their respective meanings from the Principal Notification SO 1433(E) issued by the Ministry of Labour and Employment dated 29.03.2015 as amended from time to time by the Central Government in this behalf and the said investments shall be subject to such conditions as prescribed in such notification.
(3) Any funds that are not invested in the manner specified under sub-rule(1) may be deposited into: (i) a Post Office Savings Bank Account in India, or (ii) a current account or Savings Bank Account with any scheduled bank. (4) For the purposes of this rule,—
(i) the expression “Government securities” shall have the meaning assigned to it in Government securities as defined in section 2(f) of the Government Securities Act, 2006 (38 of 2006);
(ii) the manner of investment specified in sub-rule (1) shall apply to the aggregate amount of moneys with the fund in the tax year.
(iii) moneys received on transfer, maturity or realisation of any security or deposit forming part of a fund or by withdrawal from any account in a bank (including a Post Office Savings Bank Account) shall be deemed to be moneys accruing to the fund;
(iv) “scheduled bank” means
a. the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955),
b. a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959),
c. a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980),
d. or any other bank, being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934).
