Draft Income Tax Rules 184, 185 and 186 – Options for Deemed Application, Statement for Income Accumulation, and Application for Change of Accumulated Income Purpose by Registered NPO
Draft Rules 184, 185, and 186 of the Draft Income-tax Rules, 2026 prescribe procedural compliance requirements for registered non-profit organisations (NPOs) in relation to deemed application of income, accumulation of income, and change of accumulation purpose. Rule 184 mandates that an NPO intending to exercise the option under section 341(7) for deemed application under section 341(5) must file Form No. 108 on or before the due date specified under section 263(1) for furnishing the return of income. The form must be submitted electronically using either a digital signature or electronic verification code (EVC).
Rule 185 requires NPOs seeking to accumulate or set apart any portion of their regular income under section 342(1) to furnish a statement in Form No. 109 within the same return filing due date, also through electronic mode with digital signature or EVC.
Rule 186 governs applications for change of purpose of accumulated income under section 342(5). Such requests must be made to the Assessing Officer in Form No. 110, filed electronically, verified as per section 265, and authenticated through digital signature or EVC, depending on the return filing requirement. Collectively, these rules standardise timelines, digital filing modes, and verification requirements to ensure procedural transparency and compliance discipline for NPOs.
Extract of Rule No. 184, 185 and 186 of Draft Income-tax Rules, 2026
Rule 184
Exercise of options by a registered non-profit organisation under section 341(7) for deemed application under section 341(5) of the Act.
(1) The option to be exercised in accordance with provisions of section 341(7) for any tax year shall be exercised in Form No. 108 on or before the due date specified under section 263(1) for furnishing the return of income.
(2) The option in Form No. 108, shall be furnished electronically either under digital signature or electronic verification code.
Rule 185
Furnishing of statement by registered non-profit organisation under section 342(1) for accumulating or setting apart any part of its regular income.
(1) The statement to be furnished to the Assessing Officer under section 342(1) shall be furnished in Form No. 109 on or before the due date specified under section 263(1) for furnishing the return of income.
(2) The statement in Form No. 109, shall be furnished electronically either under digital signature or electronic verification code.
Rule 186
Application under section 342(5) for change of purpose for which income has been accumulated or set apart.
(1) Where a registered no-profit organisation has accumulated or set apart any part of its regular income in accordance with the provisions of section 342(1), it may request the Assessing Officer for the change of purpose for which such income is accumulated or set apart, by furnishing an application to the Assessing Officer in Form No. 110.
(2) Form No. 110, shall be, –
(a) furnished electronically, —
(i) under digital signature, if the return of income is required to be furnished under digital signature;
(ii) through electronic verification code in a case not covered under sub-clause (i); and
(b) verified by the person who is authorised to verify the return of income under section 265, as applicable to the applicant.
