CBDT Notification 139/2026: NPO Merger Conditions Under Rule 189A and New Form 112A — Income-tax (Eighth Amendment) Rules, 2026

The Income-tax (Eighth Amendment) Rules, 2026 are now in force. CBDT Notification No. 139/2026 [G.S.R. 961(E)], dated 30 October 2026, inserts new Rule 189A into the Income-tax Rules, 2026, laying down twelve conditions that registered non-profit organisations (NPOs) must satisfy when they merge with another registered NPO having the same or similar objects — and a brand-new Form 112A to intimate the merger within one month from the end of the month in which it takes effect.

In plain terms: if two registered charities want to merge, CBDT has now written down exactly what they must get right first — twelve conditions, one new form, and a one-month filing clock. Get any of them wrong and the merger will not meet the conditions the Income-tax Act, 2025 points to in sections 352(4) and 354A.

What changed

Until 30 October 2026, the Income-tax Rules, 2026 — the principal rules notified vide G.S.R. 198(E) on 20 March 2026 and last amended vide G.S.R. 901(E) on 19 October 2026 — contained no prescribed conditions for the merger of registered non-profit organisations, and no form for intimating such a merger. Notification No. 139/2026, issued by the Central Board of Direct Taxes under section 533 read with sections 352(4) [Table: Sl. No. 8] and 354A of the Income-tax Act, 2025 (30 of 2025), fills that gap in one stroke.

Rule 189A is inserted immediately after Rule 189 of the Income-tax Rules, 2026. It prescribes the conditions for the merger of a registered non-profit organisation with any other registered non-profit organisation having the same or similar objects, for the purposes of sections 352(4) [Table: Sl. No. 8] and 354A of the Act. A new Form No. 112A — "Intimation for merger of registered non-profit organisations" — is inserted in Appendix III of the Rules, immediately after Form No. 112.

The rules came into force on the date of their publication in the Official Gazette, that is, 30 October 2026. The notification is signed by Rohit Singh, Under Secretary (TPL-I), CBDT, under F. No. 370142/32/2026-TPL.

The 12 conditions in Rule 189A

Rule 189A(1) lists twelve conditions, clauses (a) to (l). They fall into four groups.

1. Who can merge with whom

• Same or similar objects only. A registered NPO may merge only with another registered NPO having the same or similar objects.
• No mixing of registration status. An NPO registered under section 332 shall not merge with an NPO only provisionally registered under section 332 — and a provisionally registered NPO shall not merge with a fully registered one. The two categories are kept strictly separate, both ways.

2. Money: no unpaid demands, no related-person benefit

• No outstanding demand. There must be no tax, interest, penalty, fine or any other sum payable in consequence of an order passed under the Act in respect of the merging NPO, where that outstanding demand is not in appeal before any appellate authority.
• Appeals are not an escape route. Where an appeal is pending, the outstanding demand for the merging NPO must be paid by the merged NPO when the appeal attains finality.
• No benefit to related persons. The merger must not result in any direct or indirect benefit to any related person, as referred to in section 337(1) [Table: Sl. No. 2], of the merging or the merged NPO.

3. Continuity: objects, assets and obligations survive the merger

• Five-year freeze on objects. The objects of the merged NPO must not be amended within five years from the end of the financial year in which the merger takes place.
• Assets and liabilities transfer. All assets and liabilities of the merging NPO become the assets and liabilities of the merged NPO from the date of the merger.
• Obligations transfer in full. All obligations of the merging NPO become the obligations of the merged NPO, including: application of its income as per section 341; application of its accumulated income as per section 342; liability to pay tax under section 334 in respect of its specified income; ensuring the conditions in section 340 are not violated; investment of funds as per the modes specified in section 350; and payment of additional income-tax under section 352 whenever such liability arises.

4. Compliance: intimation, proceedings and audit

• Form 112A within one month. The merged NPO must intimate the jurisdictional Principal Commissioner or Commissioner in Form No. 112A within one month from the end of the month in which the merger comes into effect.
• Proceedings follow the merged NPO. Any assessment, reassessment or other proceedings made or initiated on the merging NPO are deemed to have been made or initiated on the merged NPO. For the tax year of the merger (up to the merger date) and preceding tax years, proceedings are made on the merged NPO in the same manner and to the same extent as they would have been made on the merging NPO.
• Audit as on the merger date. The merging and the merged NPO must get their books of accounts audited by an accountant defined in section 515(3)(b), as on the date of the merger.

Form 112A itself must be furnished electronically, either under digital signature or through an electronic verification code — the code being one generated for electronic verification of the person furnishing the form, as per the data structure and standards specified by the Director General of Income-tax (Systems).

Old vs new: what Rule 189A changes

Who is affected

The rule bites on every registered non-profit organisation that is considering a merger — trusts, societies and institutions registered under section 332 of the Income-tax Act, 2025 — and on their advisers. In practice, that means:

• Trustees and governing bodies of two NPOs planning to combine must now pass a board resolution and check the twelve conditions before finalising the merger, rather than treating the merger as a purely internal restructuring.
• Chartered accountants and tax advisers must build the Rule 189A checklist into merger diligence: registration-status matching, demand status, related-person analysis, and the audit as on the merger date.
• Merged (surviving) NPOs inherit everything — assets, liabilities, pending proceedings, and the obligation to apply income and accumulated income under sections 341 and 342 and to invest funds only in the modes in section 350.
• Provisionally registered NPOs face a hard boundary: they can only merge with another provisionally registered NPO, never with a fully registered one.

The rule sits inside the new Income-tax Act, 2025 framework — the Act the notification itself cites (30 of 2025) — and the Income-tax Rules, 2026 that operate under it. It is the latest in a run of CBDT notifications under the new regime, following Notification No. 136/2026 on TDS exemption for NDB Maharajah INR bonds and Notification No. 137/2026 prescribing Form 173A for government-securities tax exemption, both covered earlier on CorpLawUpdates.

What to do next: a checklist for merging NPOs

1. Match objects and registration status first. Confirm both NPOs have the same or similar objects, and that both are either fully registered or both provisionally registered under section 332. A mismatch on either point stops the merger under Rule 189A.
2. Clear the demand position. Check whether the merging NPO has any outstanding demand under an order under the Act. If a demand exists and is not in appeal, it must be cleared. If it is in appeal, diarise that the merged NPO must pay it when the appeal attains finality.
3. Screen for related-person benefit. Test the merger against section 337(1) [Table: Sl. No. 2] — no direct or indirect benefit may flow to a related person of either organisation.
4. Pass the resolution and fix the merger date. The merger is decided by a resolution of the trustees, governing body or management. The resolution copy is Annexure A-3 to Form 112A, so keep it on record.
5. Get the audit done as on the merger date. Both organisations must have their books audited by an accountant as defined in section 515(3)(b), as on the date of merger — and the audited books for the financial year immediately preceding the tax year of the merger are also required as Annexure A-4.
6. Assemble the Form 112A file. Trust deeds of both NPOs (A-1), registration copies of both (A-2), the resolution (A-3), audited books (A-4) and the written reasons for undertaking the merger (A-5).
7. File Form 112A on time. The merged NPO must intimate the jurisdictional Principal Commissioner or Commissioner in Form 112A within one month from the end of the month in which the merger comes into effect — electronically, under digital signature or electronic verification code. Miss the window and the intimation is late; the rule gives no extension mechanism.
8. Freeze the objects for five years. Do not amend the merged NPO's objects within five years from the end of the financial year in which the merger takes place.
9. Carry the obligations forward. Apply the merging NPO's income and accumulated income under sections 341 and 342, keep investments within section 350 modes, and pay any additional income-tax under section 352 as and when liability arises.

Inside Form 112A

Form 112A has two parts plus a declaration. Part A captures the merging NPO — name, address, Permanent Account Number, email id, contact number and the date of merger. Part B captures the merged NPO — name, address, PAN, email id and contact number — plus the "other details" that must be provided as a separate enclosure, namely the five annexures listed above.

The declaration is signed on behalf of the merged NPO and records that the merger was decided by a resolution of the trustees, governing body or management. It carries undertakings that the objects will not be amended for five years; that income and accumulated income will be applied under sections 341 and 342; that no depreciation will be claimed by the merged NPO where the cost of acquisition was already claimed as application by the merging NPO; that the merged NPO will pay tax under section 334 on the merging NPO's specified income; that contributions to the merging NPO count towards total contributions to the merged NPO for section 355(h)(ii); that section 340 conditions will not be violated; that investments will follow section 350; and that additional income-tax under section 352 will be paid whenever liability arises.

Some information in the form will be pre-filled, to the extent possible, per the form's own notes.

What the notification does not cover

Two points are not checked in this article because the notification itself does not address them, and no official clarification has been traced:

• Mergers completed before 30 October 2026. The notification says the rules come into force on Gazette publication and prescribes conditions for future mergers; it does not state any transitional treatment for mergers already completed or already in progress before that date.
• The scope of "specified income" under section 334. Rule 189A makes the merged NPO liable to pay tax under section 334 on the merging NPO's specified income, but the notification does not define that term — it sits in the Act itself, not in this notification.

Do not assume either point from this article; advisers should check the Act and any later CBDT clarification before advising on a pre-30-October merger.

FAQs

What is CBDT Notification 139/2026?
CBDT Notification No. 139/2026 [G.S.R. 961(E)], dated 30 October 2026, notifies the Income-tax (Eighth Amendment) Rules, 2026. It inserts Rule 189A into the Income-tax Rules, 2026, prescribing twelve conditions for the merger of registered non-profit organisations, and introduces Form 112A for intimating the merger.

Can a registered NPO merge with a provisionally registered NPO?
No. Rule 189A bars it in both directions: a registered NPO under section 332 cannot merge with a provisionally registered NPO, and a provisionally registered NPO cannot merge with a fully registered one. Both merging organisations must hold the same registration status.

What is Form 112A and when must it be filed?
Form 112A is the new electronic intimation for the merger of registered non-profit organisations, inserted in Appendix III of the Income-tax Rules, 2026. The merged NPO must file it with the jurisdictional Principal Commissioner or Commissioner within one month from the end of the month in which the merger comes into effect, under digital signature or electronic verification code.

What happens to the merging NPO's unpaid tax demands after the merger?
The merger cannot proceed with an unpaid demand that is not under appeal. If the demand is under appeal, the merged NPO must pay it when the appeal attains finality. All assessments and proceedings on the merging NPO are deemed to be on the merged NPO.

Can the merged NPO change its objects after the merger?
Not for five years. Rule 189A requires that the objects of the merged NPO not be amended within five years from the end of the financial year in which the merger takes place.

When did the Income-tax (Eighth Amendment) Rules, 2026 come into force?
On 30 October 2026 — the date of their publication in the Official Gazette. The notification states the rules "shall come into force on the date of their publication in the Official Gazette".

Related reading

• CBDT Form 173A: tax exemption on government securities — Notification 137/2026
• CBDT TDS exemption for NDB Maharajah INR bonds — Notification 136/2026
• India–Mauritius DTAA protocol: principal purpose test — Notification 135/2026

Sources

• Primary source: CBDT Notification No. 139/2026 [G.S.R. 961(E)] dated 30 October 2026 — Income-tax (Eighth Amendment) Rules, 2026, Gazette of India, Extraordinary, Part II, Section 3(i) — incometax.gov.in (official Gazette PDF)
• CBDT News & e-Campaigns listing, incometax.gov.in — entry dated 3 November 2026 recording Notification No. 139/2026, Rule 189A and Form 112A.

Last verified by team: 5 November 2026, against the official Gazette PDF on incometax.gov.in. Every factual claim in this article traces to that notification; points the notification does not address are marked "not checked" above.