Quick Summary
The Finance Bill, 2026 has proposed a significant amendment to the taxation framework governing mergers of non-profit organisations (NPOs), aiming to align the new NPO regime with the erstwhile provisions applicable under section 12AC of the Income-tax Act, 1961. Background: Existing Provision Unde
Daily Limit Reached
You have reached your daily limit of 2 Free News
Subscribe to CCI PRO for unlimited access
Why Upgrade to CCI PRO?
- No Ads
- WhatsApp Broadcasts
- Daily E-Newsletter
- Unlimited News Access
BEST VALUE
2 YEAR PLAN
3,499
(Inclusive of GST)
1 YEAR PLAN
1,999
(Inclusive of GST)
View all CCI PRO benfits
Already a PRO member? Login here for an ad-free experience.
FAQ :
A new Section 354A is being introduced to exempt accreted income tax when a registered NPO merges with another registered NPO that has the same or similar objects, from April 2026.
These amendments will come into force from 1st April 2026 and will apply from the Tax Year 2026-27 onwards.
The previous rules did not explicitly cover mergers between registered NPOs with the same or similar objects, creating ambiguity around the taxability of accreted income in such cases.
No, the exemption applies only if the merging NPOs are registered, have the same or similar objects, and fulfil any other prescribed conditions.
NPOs should carefully check if their objects are identical or substantially similar, ensure compliance with the new Section 354A conditions, and review their merger documentation to avoid unintended tax implications.
CAclubindia
