Form 109 Income Tax Rules 2026 pdf download and Key points
FORM NO. 109
[See rule 185]
Statement of accumulation or setting apart of income under section 342(1)
Form No. 109 under the new Income-tax Rules, 2026 replaces the old Form 10 used under the 1962 rules. It is an essential compliance document for registered non-profit organisations (NGOs).
Here are all the key points regarding Form 109:
- Purpose: Form 109 is a statement filed by a registered non-profit organisation to exercise its option to accumulate or set apart a portion of its regular income under Section 342(1) of the Income-tax Act, 2025. This allows the organisation to save the income for a specific purpose to be applied in subsequent tax years, for a period not exceeding 5 tax years.
- Mandatory Requirement: Filing this form is mandatory if the organisation wishes to claim the accumulated amount as an application of income. Failure or delay in filing will result in the loss of the tax exemption benefit, meaning the accumulated income will be brought to tax in the year it was received.
- When to File (Due Date): It must be filed annually, on or before the due date for filing the return of income under Section 263(1) for the relevant tax year.
- Mode of Filing: The form must be filed electronically/digitally on the Income Tax e-filing portal and is furnished to the Commissioner of Income Tax (CPC). It cannot be filed offline.
- Mandatory PAN: A valid Permanent Account Number (PAN) is mandatory to file the form.
- No Editing After Submission: Once Form 109 is successfully submitted, it cannot be edited, so the applicant must ensure all details are correct prior to submission.
- Structure of the Form:
- Part A: Captures the applicant’s particulars, including Name, Address, PAN, Email, Contact Number, and the relevant Tax Year.
- Part B: Captures the detailed breakdown of the accumulation, which includes:
- Details of the amount being accumulated for the current tax year, including the specific purpose, period of accumulation, and the date of the resolution passed by the trustees/governing body.
- The status and details of amounts accumulated or set apart in the preceding tax years.
- Details of any non-application of accumulated income due to an injunction or order of a Court.
- Outcome: After successfully processing Form 109, the registered non-profit organisation is permitted to claim the reported accumulated or set-apart amount in their subsequent income tax return.