Schedule 115TD – Accreted Income under section 115TD AY 2026-27
Schedule 115TD in the Income Tax Return (ITR) form is applicable to charitable or religious trusts/institutions claiming exemption under Section 11, Section 12, or Section 10(23C)(iv)/(v)/(vi)/(via), where the registration/approval has ceased to be in effect, or there is a conversion or merger in violation of specified conditions. In such cases, the trust or institution is liable to pay additional income tax on accreted income under Section 115TD.
Tax on accreted income is levied in the following circumstances:
- a) If a specified trust or institution is converted into any form which is not eligible for registration underSection 12AAor Section 12AB or approval under Section 10(23C);
- b) If a specified trust or institution is merged with an entity which is not have similar objectives and not registered underSection 12AAor Section 12AB or approved under Section 10(23C);
- c) In case of dissolution, the specified trust or institution fails to transfer all its assets to any other trust or institution registered underSection 12AAor Section 12AB or approved under Section 10(23C) within 12 months from the end of the month in which the dissolution takes place.
The schedule requires disclosure of the fair market value (FMV) of total assets, liabilities, and the net asset value. Certain exclusions from the FMV are allowed, such as assets acquired from agricultural income, assets acquired before registration where no exemption was claimed, or assets transferred as per Section 115TD(2). After adjusting for related liabilities, the accreted income is computed and taxed at the maximum marginal rate.
It also requires reporting of interest payable under Section 115TE, tax and interest paid, net payable/refundable amount, and payment details, including bank name, BSR code, challan number, and deposit dates.
- Section115TDof Income-tax Act, 1961
- RuleRule 17CBof the Income-tax Rules, 1962
A specified person is liable to pay additional income-tax on the accreted income under Section 115TD, which arises on its conversion into a non-charitable form, failure to apply for renewal of registration, or on the transfer of assets on its dissolution to a non-charitable institution. The tax on accreted income shall be levied at the maximum marginal tax rate, and this tax is in addition to income-tax chargeable in the hands of the specified person.
This schedule applies to ITR-5, ITR-6 and ITR-7.