Form 110 for NPOs: Complete Guide to Changing Purpose of Accumulated Income under Section 342(5)

Non-profit entities that have accumulated or set apart income for specific objectives often face practical situations where the original planned purpose needs to be revised. The Income Tax framework under the Income Tax Act 2025 now recognises this need through Section 342(5), implemented via Form 110 (FN 110).

This new electronic form allows a registered non-profit organisation to formally seek approval for changing the purpose of income already accumulated or set-apart and previously declared in Form 109.

This guide explains:

  • What Form 110 (FN 110) is and when it is required
  • Who must file it and how it must be filed
  • Timelines and procedural steps
  • Role of the Commissioner of Income Tax (CPC) and jurisdictional Assessing Officer
  • Practical implications and key compliance points for NPOs

1. Regulatory Background of Form 110

1.1 Statutory Basis

Form 110 has been introduced under the new regime applicable from the Income Tax Act 2025. Its legal foundation is as follows:

  • Corresponding section in Income Tax Act 2025: Section 342(5)
  • Corresponding rule in Income Tax Rules 2026: RN 186
  • Name of form under Income Tax Rules 2026: FN 110

Under this framework, Section 342(5) provides a mechanism for a registered non-profit organisation that has already filed Form 109 to seek approval for modifying the purpose for which the relevant income was accumulated or set apart.

1.2 Linkage with Form 109

Form 110 is not a standalone filing. It is directly connected to earlier accumulation or setting apart of income that has already been:

  • Declared and justified through Form 109, and
  • Approved for accumulation for a specified time period in that Form 109.

Any subsequent change in the intended use (purpose) of such accumulated income must be routed through Form 110, before the expiry of the originally permitted accumulation period.

2. What Is Form 110 (FN 110)?

2.1 Core Objective

Form 110 (FN 110) is an electronic application through which a registered non-profit organisation requests approval for:

  • Amending the original purpose for which income was accumulated or set-apart in a particular tax-year, and
  • Substituting or modifying that purpose with a new or revised purpose, subject to approval.

The form is used only where:

  • Income has already been accumulated/set-apart and reported in Form 109, and
  • The organisation now wishes to change the purpose related to that specific accumulation.

2.2 Nature of Filing

  • Mode: Digital/electronic filing only through the Income Tax e-filing portal
  • Manual/offline filing: Not permitted
  • Editing post-submission: Not allowed – the form becomes frozen once submitted

Important: Once Form 110 is filed, it cannot be altered. The assessee must verify all particulars meticulously before final submission.

3. Who Must File Form 110?

3.1 Eligible and Obligated Entities

Form 110 is specifically intended for:

  • Registered non-profit organisations (for example, trusts, societies, or other institutions registered under the applicable provisions),
  • That have:
    • Accumulated or set apart income for a tax-year,
    • Reported such accumulation through Form 109, and
    • Now intend to change the purpose originally mentioned in that Form 109.

If such a change of purpose is proposed, filing Form 110 is mandatory. Without the filing and approval of FN 110, the assessee cannot validly re-purpose the accumulated funds.

3.2 Mandatory Nature

If the organisation:

  • Has no intention to alter the originally declared purpose in Form 109, Form 110 is not required.
  • Intends to modify the declared purpose even partially, Form 110 must be filed prior to utilising the accumulated funds for the new purpose.

4. When and Where to File Form 110

4.1 Time Limit and Frequency

Form 110 is required to be filed: