Income Tax Form 109: Statement for Accumulation of NPO Income – Section 342(1)

Form 109 is a mandatory electronic statement required to be filed by registered non-profit organisations opting to accumulate or set apart a portion of their regular income under section 342(1) of the Income-tax Act, 2025 for application in subsequent tax years, up to a maximum period of five years. The form must be filed online with the Commissioner of Income Tax (CPC) on or before the due date of filing the return of income under section 263(1). Filing Form 109 enables the organisation to claim exemption on the accumulated income in subsequent returns; failure to file within the prescribed timeline results in denial of such benefit and taxation of the income in the year of receipt. The form requires disclosure of details regarding accumulation, purpose, period, prior accumulations, and reasons for non-application, if any. Once submitted, it cannot be modified, and a valid PAN is mandatory for filing.

Income Tax Department
Ministry of Finance, Government of India

FAQs on Income Tax Form 109: Statement of accumulation or setting apart of regular income under section 342(1) of Income-tax Act, 2025

Form 109 – Frequently Asked Questions

Statement of accumulation or setting apart of regular income under section 342(1) of the Income-tax Act, 2025

Q1. What is FN 109 ?

Ans: FN 109 is a statement to be furnished electronically/digitally by a registered non-profit organisation willing/opting to accumulate or set-apart a part of regular income under section 342(1) of the Act for application in subsequent tax-years for a period not exceeding 5 tax-years.

Q2. Who should file FN 109?

Ans: Any registered non-profit organisation willing/opting to accumulate or set apart an amount in accordance with provisions of section 342(1) of the Act is required to file FN 109

Q3. Is FN 109 mandatory?

Ans: FN 109 is mandatory for making claim such accumulated or set-apart amount in accordance with provisions of section 342(1) of the IT Act, 2025

Q4. What is the time limit for filing FN 109?

Ans: FN 109 is required to be filed on or before the due date of filing of return of income for the concerned tax-year u/s 263(1) of the Income-tax Act, 2025.

Q5.Where can I file FN 109 and to which authority is it required to be furnished to ?

Ans: FN 109 is required to be furnished electronically to Commissioner of Income Tax (CPC) on

the e-filing portal.

Q6. What happens after I file FN 109 ?

Ans: Upon successful filing of FN 109, the registered non-profit organisation may claim such reported amount in FN 109 as amount accumulated or set-apart in accordance with provisions of section 342(1) of the Act in the return of income filed subsequently.

Q7.Can I edit FN 109 after submission?

Ans: No. Once FN 109 is submitted, it cannot be edited. Ensure all details are correct before submission.

Q8.While filling Part A of FN 109, can I leave PAN blank?

Ans: A valid PAN is mandatory for all applicants filling the form and FN 109 cannot be filed in

absence of PAN.

Q9.Can FN 109 be filed offline?

Ans: No. FN 109 can only be submitted online through the Income Tax e-Filing portal.

Q10.Why is FN 109 important?

Ans: FN 109 is important to file within prescribed time limits as non-filing or delayed filing shall result in losing the benefit of claiming exemption on such accumulated amount as application of the income thereby bringing such income to tax in the tax year of such receipt of income.

Guidance Note on Income Tax Form 109: Statement of accumulation or setting apart of regular income under section 342(1) of Income-tax Act, 2025

Form 109 – Statement to be furnished for accumulation or set-aside of regular income u/s 342(1) of the Income Tax Act,2025

Purpose:

Form 109 is a statement to be furnished electronically/digitally by a registered non-profit organisation willing/opting to accumulate or set-apart a part of regular income ion u/s 342(1) of the Act for application in subsequent tax-years for a period not exceeding 5 tax-years.

Who Should File:

Any registered non-profit organisation willing/opting to claim an amount of regular income to be treated as amount accumulated or set-apart in accordance with provisions of section 342(1) of the Act.

The application in Form 109 is required to be furnished electronically on the e-filing portal. Frequency & Due Dates:

Structure of Form 109:

> Details of amount accumulated or set-apart along with purpose and period of such accumulation/setting-apart of such regular income

> Details of amount accumulated or set-apart in tax-years preceding the current tax-year

> Details of non-application of such accumulated/set-apart income due to injunction/order of Court

Filing Count:

On average, 0.24 lakh Form No 10 (now Form No.109) were filed each year over the past five years.

What is the process flow of filing Form 109?

The process flow includes following steps

1. Furnishing details of accumulation/set-apart of regular income of the current tax-year;

2. Furnishing details of amount accumulated or set-apart for the tax-years prior to the current tax-year;

3. Furnishing details of non-application of such accumulated/set-apart income due to injunction/order of Court

Outcome of Processed Form 109:

Registered non-profit organisation may claim such reported accumulation or set-apart amount of regular income in the return of income filed subsequently as amount accumulated or set-apart for application in the subsequent period not exceeding 5 tax-years.

Brief note on broad or qualitative changes proposed:
Simplification of already existing form in alignment with the Act

Challenges and Solutions:
NA

Common Changes made across Forms:

1. Assessment / Financial / Previous year or years have been replaced with Tax year or years, wherever appearing in the Form/Annexure.

2. Sections, Clauses and Schedules changes as per the Income-tax Act, 2025.