Rule 181 of Income 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.
Rule 181 of the Income-tax Rules, 2026 prescribes a common application for registration of a non-profit organisation under section 332 and approval under section 354. Form No. 104 goes to the Commissioner (CPC) for provisional cases and Form No. 105 to the jurisdictional Principal Commissioner or Commissioner, with orders issued in Forms 106 and 107.
One application, two sections
The heading of rule 181 is deliberate: a common application for registration of a non-profit organisation or for approval for the purposes of deduction under section 133(1)(b)(ii). Under the 1961 Act these were separate journeys — section 12A/12AB registration on one track and section 80G approval on another, even though the same trust filed both. Rule 181 merges them into one form with section codes.
It replaces rules 11AA and 17A of the Income-tax Rules, 1962.
Which form, which authority — rule 181(1)
| Sl. No. | Case | Form | Authority |
|---|---|---|---|
| 1 | Application for provisional registration or approval under section 332(3) or section 354(2) | 104 | Commissioner of Income Tax (CPC) |
| 2 | Application for registration or approval under section 332(3) or section 354(2) | 105 | Principal Commissioner or Commissioner having jurisdiction over the applicant |
The split is centralised versus jurisdictional. A provisional application is processed by CPC — a systems-driven grant. Everything else goes to the officer with jurisdiction, who examines it.
How the application is filed — rule 181(2) and (3)
The application must be accompanied by the documents, information and undertakings specified in the relevant Form. It must be furnished electronically:
- under digital signature, if the return of income is required to be furnished under digital signature; or
- through electronic verification code in any other case;
and it must be verified by the person authorised to verify the return of income under section 265 as applicable to the applicant.
The provisional route — rule 181(4) to (9)
On receipt of Form No. 104, the Commissioner of Income Tax (CPC) passes an order in writing in Form No. 106, issuing a 16-digit alphanumeric Unique Registration Number (URN) and granting registration under section 332(8) or approval under section 354(4), or both.
Rule 181(5) is blunt: Form No. 104 shall be considered non-est and shall not be further proceeded with where the activities have commenced, or where the applicant has already been registered under any specified provision. The provisional route is for organisations that have not yet begun activities. An organisation that has been operating and files Form 104 does not merely get a rejection — the application is treated as never having been made.
Cancellation. Under rule 181(6), the registration or approval granted in Form No. 106 and the URN may be cancelled by the Principal Commissioner or Commissioner, after giving an opportunity of being heard, if at any time it is noticed that the Form No. 104:
- contains any false or incorrect information; and
- does not comply with the requirements of sub-rule (3).
Where cancelled, rule 181(7) provides that the registration, approval or URN is considered to have never been granted or issued — a complete rollback, not a prospective withdrawal.
Surrender. Rule 181(8) allows an applicant to surrender the registration or approval granted under sub-rule (4) if the applicant:
- (a) has not claimed benefits in its return of income for any tax year, including the year of surrender, under Part B of Chapter XVII of the Act, or under section 10(23C)(iv), (v), (vi) or (via) of the Income-tax Act, 1961 as it existed prior to its repeal, or under section 11 or section 12 of that repealed Act; and
- (b) gives an undertaking that no claim of benefits will be made in the return of income for any tax year under those provisions.
On surrender, rule 181(9) provides that the registration or approval is deemed never to have been granted.
The jurisdictional route — rule 181(10) to (12)
On receipt of Form No. 105, the Principal Commissioner or Commissioner passes an order in writing in Form No. 107, doing any of the following:
- (a) issuing a 16-digit alphanumeric URN and granting registration or approval;
- (b) rejecting the application;
- (c) rejecting the application and also cancelling the registration or approval; or
- (d) granting under one section code and rejecting under the other section code mentioned in the application.
Clause (d) matters because rule 181 merges the registration and the donation-deduction approval into one form. An organisation can be granted registration under section 332 while being refused approval under section 354, in a single Form No. 107 order. Read such an order carefully — the two section codes are decided separately, and only the refused limb needs to be addressed on re-application or appeal.
Withdrawal. Rule 181(11) allows the applicant to withdraw the application within seven days of filing. This is a short window and it is the only clean exit once the form has gone in.
Re-application. Under rule 181(12), where an order in Form No. 107 has rejected the application or cancelled the registration or approval, the applicant may re-apply in Form No. 105 within one month from the end of the month in which the order was passed, where the rejection or cancellation was on account of failure to provide documents or information sought by the Principal Commissioner or Commissioner, among the conditions specified.
Old forms and new forms
| Purpose | 1962 Rules | 2026 Rules |
|---|---|---|
| Provisional registration or approval application | Form 10A | Form No. 104 |
| Regular registration or approval application | Form 10AB | Form No. 105 |
| Order on a provisional application | Form 10AC | Form No. 106 |
| Order on a regular application | Form 10AD | Form No. 107 |
| Registration provision | Sections 12A and 12AB | Section 332 |
| Donation approval provision | Section 80G | Section 354, for deduction under section 133(1)(b)(ii) |
| Registration identifier | Unique Registration Number | 16-digit alphanumeric URN |
Worked example
A newly formed charitable trust that has not yet started activities applies in Form No. 104 for both registration under section 332 and approval under section 354. CPC issues Form No. 106 with a 16-digit URN granting both.
Two years later the trust applies for regular registration in Form No. 105. The Commissioner is satisfied on the charitable objects but not on the donation-approval conditions, and passes a Form No. 107 order under clause (d) — granting registration under the section 332 code and rejecting under the section 354 code.
The trust has one month from the end of the month of that order to re-apply in Form No. 105 for the rejected limb, where rule 181(12) conditions are met. Its section 332 registration is unaffected.
Compliance checklist
- Confirm whether activities have commenced before choosing Form No. 104 — rule 181(5) makes a wrong choice non-est.
- File electronically with the correct authentication — DSC where the return needs a DSC, else EVC.
- Have the form verified by the section 265 authorised person.
- Attach every document, information and undertaking the Form specifies — incomplete filing is the stated ground for rejection and re-application under rule 181(12).
- Diarise the seven-day withdrawal window and the one-month re-application window.
- Record the 16-digit URN in the organisation's statutory records; it is quoted in downstream filings.
- Before surrendering, confirm no benefits have been claimed in any year, including under the repealed 1961 Act provisions.
Common mistakes
- Filing Form 104 after activities have started. The application is treated as never made.
- Missing the seven-day withdrawal window.
- Reading a Form 107 order as a single outcome. It may grant one section code and reject the other.
- Surrendering while a past-year benefit claim stands. Rule 181(8)(a) bars it.
- Citing Forms 10A, 10AB, 10AC or 10AD for tax year 2026-27.