Finance Bill 2026 allows Registered NPOs to File Belated Income-Tax Returns

 

Amendment in the budget:

The Finance Bill, 2026 proposes an amendment to section 349 of the Income-tax Act, 2025 to expressly allow registered non-profit organisations (NPOs) to file belated returns of income.

 

Existing provisions:

Under the existing framework, section 349 of the Income Tax Act, 2025 permits NPOs to furnish returns only within the time limit prescribed under section 263(1)(c), with no explicit reference to belated return provisions.

This has created a departure from the position under the Income-tax Act, 1961, where NPOs were permitted to file belated returns within the extended statutory timeline.

 

Details of the amendment:

To restore consistency and provide compliance flexibility, Clause 67 of the Finance Bill, 2026 inserts a reference to section 263(4) in section 349, thereby enabling registered NPOs to furnish returns even after the original due date.

The amendment ensures that delay in filing does not automatically deprive NPOs of the opportunity to comply with return filing requirements.

This change will take effect from 1 April 2026 and will apply to the tax year 2026–27 and subsequent years.