Income Tax Departments has offered relief to charitable institutions which missed the deadline of 30 September 2025 for filing registration renewal applications. However, experts say that this relief has riders attached.
Section 80G of the Income Tax Act provides for deduction in respect of donations made to certain funds or institutions. Now, for availing approval or whose approval is due to expire, a fund or institution requires to file an application through form 10AB electronically, at least six months prior to expiry of the said period. Accordingly, some of the funds and institutions whose approval for exemption expiring on March 31, 2026, but could not furnish the form by September 30, 2025, approached the board for relief.
“In order to mitigate genuine hardship to such funds and institutions, Central Board of Direct Taxes (the apex policy making body of the Income Tax Department), condones the delay in filing form 10AB, which were furnished between October 1, 2025, and March 31, 2026,” the department said in a circular. Further, the Principal Commissioner of Income Tax or Commissioner of Income Tax has been authorised to dispose ‘on merit’ and pass an order by December 31, 2026. Also, those forms filed during October-March period, but rejected on the ground of delay, will also be taken up for disposal on merit.
All this will ensure that such institutions will not be penalised for procedural delays. It ensures continuity of section 80G approvals (a prerequisite for donors to claim deductions) and keeps intact the ability of such institutions to raise funds. “Income-tax exemption related provisions relating to charitable institutions have become stringent in the past few years, and hence such institutions should ensure compliance with such provisions so that the exemption status remains protected.,” an tax expert said.
According to another tax expert, this circular provides relief to charitable organisations that faced genuine hardship in meeting the compliance deadline for renewal of approval. Organisations whose applications were rejected solely on account of delayed filing are effectively given a second chance. Their applications will now be reviewed on merits rather than being dismissed merely on technical grounds.
The circular helps ensure that deserving charitable organisations are not penalised for procedural lapses. This is particularly significant for institutions that depend on approved status to attract donor funding. However, “charitable institutions must note that the benefit is limited to condonation of delay and does not guarantee automatic renewal of the approval, which will continue to be subject to scrutiny by the tax authorities as per the statutory framework,” she cautioned.
