Form 112 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
This is the second half of Form 112, the audit report under section 348 of the Income-tax Act, 2025. It covers Schedules S to ZL, the auditor's verification and the Notes, as per the Income-tax Rules, 2026 (G.S.R. 198(E), notified on 20 March 2026), read with the amending notifications issued up to 22 September 2026. Part A, Part B and Schedules A to R are in the first-half article. Later notifications should be checked.
Form 112 is furnished under rule 188, one month before the due date under section 263(1). The Schedules in this half are called up by rows of Part B or by earlier Schedules: S for specified violations, T to X for corpus, foreign contribution, loans, income applied outside India and deemed application, ZA to ZC for accumulations, ZD-1 to ZD-10 for related-person dealings, ZE to ZH for other-law violations and disallowances, and ZI to ZL for cash-type limits and TDS or TCS. The auditor's verification and 22 Notes close the form.
The rule and the section
Section 348 requires an audit of the accounts of a registered non-profit organisation above the stated income level and a report in the prescribed form; rule 188 prescribes Form 112 and the time. See sections 347 to 350 and the post on rule 188.
An audit of this length is easier when the donation, accumulation and related-person records are kept in the shape the Schedules ask for. Our 12A, 80G and CSR registration team helps organisations set that up.
Schedules S to X
| Schedule | Called up by | What it asks |
|---|---|---|
| S: Specified Violation | Part B row 37 | Whether there is a specified violation under section 351(1), with amount, in seven limbs: (a) income applied other than for the objects; (b) business not incidental or separate books not kept (section 345); (c) private religious purposes; (d) benefit of a particular religious community or caste (other than Scheduled Castes, Scheduled Tribes, backward classes, women or children); (e) activity not genuine or not as per registration conditions; (f) non-compliance with another law, with an order that is undisputed or final (then Schedule ZE); (g) false or incorrect information in the application under section 332(1) |
| T: Details of Corpus | Schedule K(vii); row 22 | Corpus by type of donation: opening balance, received or treated as corpus, applied, invested or deposited back, closing balance, investment in modes specified in section 350 and in other modes. Three types: (i) donations for renovation or repair of places notified under section 133(1)(b)(vi) on or after 01.04.2020; (ii) others received on or after 01.04.2021; (iii) all other. The copy prints the column heads scrambled and the last four Yes/No conditions illegibly, so only the readable heads are listed here |
| U: Foreign contribution | Row 22 | Nature of foreign contribution received (corpus; non-corpus), amount, application from it, interest accrual on it, total |
| V: Loan and borrowing | Schedule K(viii), Schedule O | Opening balance on 1 April, loans taken for application towards objects, amount applied, repayment of loans earlier applied and not claimed, total repayment, closing balance on 31 March |
| W: Income applied outside India | Row 24(b) | Person to whom remittance is made, identification number, amount reported in Form 145, other amounts, purpose, country, whether for promoting international welfare, approval number, general or special, date, specified income under section 337 (Table: serial number 3) and income not to be included in regular income under section 338(a) |
| X: Deemed application | Schedule O | Year of deeming, date of furnishing Form 108, amount deemed applied, reason (income not received during the year, or any other reason), amounts applied or taxed later and balance (linked to Schedule ZA) |
Schedules ZA to ZC: accumulations
- ZA lists accumulated income taxed in earlier tax years under the earlier Act's provision or section 337 (Table: serial number 13), by year of accumulation against the last five tax years.
- ZB is the register of accumulations, by financial year: date of furnishing Form 109, amount accumulated, purpose, amount applied before the year, balance, amount taxed in an earlier tax year, amount applied during the year and for other purposes, amount credited or paid to another registered non-profit organisation, investments in section 350 modes and other modes, and the amount not utilised during the period. It is the source for several lines of Schedule M.
- ZC lists accumulated income taxed in earlier tax years under section 342, by year, for the last five tax years.
Schedules ZD-1 to ZD-10: related persons
Schedule R (first half) asks eight questions about dealings with related persons; each Yes sends the auditor to one or two of these Schedules. Each ends with a column for the amount of specified income as per section 337 (Table: serial number 2).
| Schedule | Row of Schedule R | Subject | Main particulars |
|---|---|---|---|
| ZD-1 | (a) | Income or property lent | Related person's name and PAN, nature and amount, security and its value, actual and adequate rate of interest |
| ZD-2 | (b) | Land, building or other property made available | Asset type and address, period (from and to), rent and adequate rent, other compensation and adequate compensation |
| ZD-3 | (c) | Salary, allowance or otherwise | Nature of services, nature and amount of payment, reasonable amount for services |
| ZD-4 | (d) | Services made available | Nature and value of services, actual and adequate remuneration or compensation |
| ZD-5 | (e) | Shares, securities or other movable property purchased | Name of the company or concern, number, price, total consideration paid and adequate consideration |
| ZD-6 | (e) | Immovable property purchased | Type, address, area, stamp duty value, consideration paid and adequate |
| ZD-7 | (f) | Shares, securities or other movable property sold | Same layout as ZD-5 |
| ZD-8 | (f) | Immovable property sold | Same layout as ZD-6 |
| ZD-9 | (g) | Income or property diverted | Nature and value of what was diverted |
| ZD-10 | (h) | Funds invested in a concern where a related person has a substantial interest | Concern, amount, duration, income, person with the interest and nature of the interest |
Schedules ZE to ZL: other laws, disallowances and cash-type limits
- ZE records violation of other laws: the law, nature of non-compliance, date of the order, direction or decree, whether it has been disputed, whether it has attained finality, and whether the dispute was finalised in favour of the auditee.
- ZF (called up by Schedule K and Schedule Q): amounts disallowable under section 341(1)(a) read with section 35(b)(i), in two tables: payments on which tax was not deducted, and payments on which tax was deducted but not paid on or before the due date in section 263(1). ZG and ZH list amounts disallowable under section 341(1)(a) read with section 36(4) and section 36(5): date, amount, nature, and the payee's name, PAN and address.
- ZI (row 40): loans, deposits or specified sums taken above the limit in section 185: lender, identification, address, amount, whether squared up, maximum outstanding, and whether repaid by account payee cheque, bank draft or electronic clearing through a bank account.
- ZJ (row 41): amounts received above the limit in section 186, per payer. ZK (row 42): repayments above the limit in section 188, with the same mode-of-repayment columns. Note 17 lists receipts and payments for which particulars need not be given and refers to a notification that is not in the text consulted.
- ZL-1, ZL-2, ZL-3 (row 43): TDS or TCS by TAN, section and nature (total amount, amount on which tax was deducted or collected, at, less than or without the specified rate, tax not deposited); statements of TDS or TCS (type of form, due date, date of furnishing, whether all transactions are reported); and interest under section 398(3) with the amount paid and its date.
Verification
The auditor states that the balance sheet and the Income and Expenditure account or Profit and Loss account are in agreement with the books; that all information and explanations necessary for the audit were obtained as far as the auditor knows and believes; that proper books have been kept at the registered office at the address shown "at serial number 14 of the Annexure"; that the particulars given are true and correct, subject to listed observations or qualifications; and that the accounts give a true and fair view of the state of affairs on the balance sheet date and of the income and application or profit or loss for the tax year, again subject to observations. The block closes with signature, name, designation, membership number, UDIN if any, firm name and registration number, date and place. The form has no Annexure, so the reference to serial number 14 reads as a drafting slip; check the official text.
The Notes
| Note | What it covers |
|---|---|
| 4 and 5 | "Auditee"; small registered NPO tests (regular income not above five crore rupees, foreign contribution not above Rs. 1000000, application outside India not above Rs. 1000000); Yes to any test in row 6 means large |
| 6 | Type of auditee codes 1 to 4 (public trust; society; company; others in section 332(1)(d) to (g)) |
| 7 and 8 | "Recognition" means registration, approval or notification; code lists 1 to 15 for the earlier Act and 1 to 10 for the Income-tax Act, 2025 |
| 9 to 11 | Relation with the auditee (a to t); identification codes (PAN 1, Aadhaar number 2; if neither, taxpayer identification number 3, passport 4, elector's photo identity number 5); objects codes 1 to 8 |
| 12 | Books-of-account codes 1 to 18, tied to rule 187 |
| 13 and 14 | Uploads of the balance sheet, profit and loss account and the audit report in Form 26 for the business; pre-filled formulas for row 22 |
| 15 | Electronic modes: credit card, debit card, net banking, IMPS, UPI, RTGS, NEFT and BHIM Aadhaar Pay, as referred to in rule 48 of the Income-tax Rules, 2025 (check that rule) |
| 16 | Related-person codes 1 to 6 (author or founder; person contributing above one lakh rupees in the year or ten lakh rupees in aggregate; HUF member; trustee or manager; relative; concern with substantial interest) |
| 17 to 22 | Schedule ZJ exceptions; "management"; foreign donation includes interest accrual under the Foreign Contribution (Regulation) Act, 2010 (check that Act); the report is by a chartered accountant; reasons to be stated for any negative answer or qualification; amounts in rupees |
Notes 13 and 14 name Schedules by letters that do not match the Schedules whose content they describe (for example Note 14 names Schedules J, V and U for row 22, where the donation, foreign contribution and corpus Schedules are I, U and T). Read the content, and check the official text for the intended Schedule.
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Key takeaways
- Schedules S to ZL are called up by Part B rows or by other Schedules; many are filled only on a Yes.
- ZD-1 to ZD-10 detail the eight related-person dealings listed in Schedule R.
- ZB is the register of accumulations; ZA and ZC show accumulations taxed earlier.
- The verification is signed by the accountant with membership number, UDIN if any and firm details.
- Note 20 requires a chartered accountant.
Read next
- Form 112, first half: Parts A and B and Schedules A to R
- Forms 113 and 114: statement of donations and certificate of donation
- Forms 108, 109 and 110: option and accumulation
- Rule 188: audit report in Form 112
Disclaimer: Based on the Income-tax Rules, 2026 (G.S.R. 198(E), notified on 20 March 2026), read with the amending notifications issued up to 22 September 2026, as consulted on 2 October 2026. It explains the words of the rules and forms only; later notifications, the forms and utilities on the e-filing portal, circulars and the way the tax authorities apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.