The Income-tax Act, 2025: what changed for NGOs

On 1 April 2026 the Income-tax Act, 2025 replaced the Income-tax Act, 1961, and almost every section and form number that Indian NGOs knew changed with it. The rules for charities mostly carried over in substance: registration still makes an NGO’s income tax-free, approval still lets donors claim a deduction, and the 85% spending rule is still there, under new numbers.

The old names haven’t gone away. Funders, CSR teams and even the CSR Rules still ask for “12A and 80G”, and the returns and audit reports filed during 2026 still use the 1961 Act’s forms. For a while, everyone who works with NGOs needs both vocabularies.

This guide is the map: the tax year, where the rules now sit, each old section and form against its new number, what changed, and what organisations registered under the old Act should do. It is for NGO founders, finance staff and their accountants.

What the new Act is, and when it started

The Income-tax Act, 2025 (No. 30 of 2025) received the President’s assent on 21 August 2025 and came into force on 1 April 2026 (Section 1(3)). Section 536(1) repealed the Income-tax Act, 1961 from the same day.

The forms are prescribed by the Income-tax Rules, 2026 (G.S.R. 198(E) of 20 March 2026, in force from 1 April 2026, and amended at least four times by September 2026). The Finance Act, 2026 amended the charity chapter from the same day, and Section 536 decides which Act applies to what.

So two Acts are live in 2026. Income earned up to 31 March 2026 is dealt with under the 1961 Act and its forms, even though the filings are made after April 2026. Income earned from 1 April 2026 falls under the 2025 Act.

The tax year replaces the previous year and the assessment year

The 1961 Act gave every year two labels. Income was earned in the previous year and assessed in the following assessment year, so income earned between April 2025 and March 2026 belonged to “previous year 2025-26” and “assessment year 2026-27”.

The 2025 Act uses one label: the tax year, which Section 3(1) defines as the twelve months of the financial year beginning on 1 April. Financial year 2026-27 is tax year 2026-27. There is no assessment year any more.

Where the rules for NGOs now sit

The 1961 Act spread the rules for charities across sections 2(15), 10(23C), 11, 12, 12A, 12AB, 13, 80G, 115BBC, 115BBI and 115TD. The 2025 Act gathers most of them into one place: Part B of Chapter XVII, “Special provisions for registered non-profit organisation”, Sections 332 to 355. The Act and the e-filing portal call it Chapter XVII-B. It has seven sub-parts:

Three things sit outside the chapter: the definition of charitable purpose (Section 2(23), formerly section 2(15)), the donor’s deduction (Section 133, formerly section 80G, with the other deductions in Chapter VIII) and the TDS rules NGOs follow as employers and payers (Sections 392 onwards).

The new Act also gives a charity with valid registration a name: a registered non-profit organisation (Section 355(g)). It covers trusts, societies, Section 8 companies and the other institutions that can register.

The old → new map

This table maps the provisions NGOs use most. The middle column is what people still say; the right-hand column is what the law says now.

And the forms:

The form numbers come from the Income Tax Department’s March 2026 guide to the new forms and the e-filing portal’s user manuals. Each guide in this series explains its own part of the map: registration, donors’ deductions, donation statements, the 85% rule, special donations, business income, the return and audit and TDS.

What carried over

There are still two permissions, applied for on the same forms: registration (Section 332) makes the organisation’s income exempt, and approval (Section 354) lets donors claim a deduction. Registration is still provisional (three tax years), then regular (five tax years, or ten for smaller organisations under Section 332(5)). The 85% rule, corpus outside it, the flat 30% tax on income that breaks the rules, the limits on business, the tax on accreted income and the donor rules (50% within a 10% limit, nothing for cash over ₹2,000 or gifts in kind) all carried over, under new numbers.

What changed

1. New vocabulary. “Tax year” for “previous year”; “registered non-profit organisation” for “trust or institution registered under section 12AB”. Income is sorted into regular income (from activities, investments, voluntary contributions and permitted commercial gains), specified income (taxed at 30%) and residual income.
2. “Related person”, not “specified person”. Insiders whose benefit is taxed are now “related persons” (Section 355(h)). The new Act uses “specified person” for something else: any organisation that has ever been registered under one of the provisions it lists (Section 355(l)). Don’t mix them up.
3. One regime. The 1961 Act had two routes: section 11 with 12AB registration, and section 10(23C). The Finance (No. 2) Act, 2024 stopped new 10(23C) approvals for applications from 1 October 2024, and the 2025 Act has a single regime in which old 10(23C) approvals count as registrations (Sections 355(f) and (m)).
4. Breaking the 20% limit no longer costs registration. Since the Finance Act, 2026, a general public utility charity whose commercial receipts exceed 20% of its total receipts pays tax at normal rates on that year’s regular income, less its permitted spending (Section 353(1)(d)). The breach is no longer, by itself, a specified violation (Section 351(1)(b) as amended).
5. Late returns can still count. Since the Finance Act, 2026, a return filed late under Section 263(4), within nine months of the end of the tax year or before assessment if that is earlier, satisfies Section 349.
6. Mergers. New Section 354A lets a registered non-profit organisation merge with another that has the same or similar objects without the tax on accreted income, if it meets conditions that are still to be prescribed.
7. One audit form. Form 112 replaces both Form 10B and Form 10BB, with a lighter version for small registered non-profit organisations.

If your NGO was registered under the old Act

You don’t need to re-register because of the new Act. A registration under section 12A, 12AA, 12AB or 10(23C), and an approval under section 80G(5), continues under the 2025 Act until it expires (Sections 355(b), (f), (g) and (m), and Section 536(2)(j)).

What you do need to do:

• Find the expiry dates. Old orders are written in assessment years. Subtract one to find the last tax year they cover.
• Renew on time. File Form 105 at least six months before the registration expires (Section 332(3)). The donor approval renews the same way, under Section 354, in the same form.
• Update your wording. Receipts, your website and grant documents can say “registered for exemption and approved for donors’ deduction under the Income-tax Act (formerly sections 12A/12AB and 80G)”, with the dates of your orders.
• Keep old promises. Income accumulated under the old section 11(2) must still be used as stated. If a condition is broken in a later year, the amount becomes income of that year (Section 536(2)(h)).

The two Acts will overlap for years in old assessments and appeals, so work with a chartered accountant who knows both before you rely on a new section number for a filing or a deadline.

Which forms you file in 2026, and which in 2027

The Central Board of Direct Taxes (CBDT) announced the 2026 extensions on 28 September 2026, moving the audit report from 30 September and the return from 31 October. Filing the return and audit report has the full calendar.

TDS is the exception. Payments made from 1 April 2026 fall under the new Act, so the quarterly TDS statements for 2026-27, the first of which was due on 31 July 2026, already use Forms 138 and 140. See TDS for NGOs.

What’s still unsettled

The Academy’s Starting an NGO course walks through the new registrations step by step.