Income-tax Act, 1961Section 115TD
- Tax at maximum marginal rate on accreted income on conversion, merger or cancellation
- Accreted income = FMV of assets minus liabilities
Applies to FY 2025-26 (AY 2026-27) and earlier years.
IT Act 1961 → 2025 / Section 115TD
Charitable trustsSection 115TD → Section 352
Exit tax on accreted income of charitable trusts
Section 115TD of the old Income-tax Act, 1961 · new section 352 under the Income-tax Act, 2025
New reference Section 352
Income-tax Act, 2025Section 352
- Same, now section 352
- Formula A = B – C (FMV of assets less liabilities)
- Payable within 14 days of the specified date
Applies from tax year 2026-27 (from 1 April 2026).
What changed
Renumbered; formula written explicitly. The Finance Act 2026 substituted the merger trigger (section 352 Table, Sl. No. 8).
Practice notes
- Specified assets (e.g. those acquired out of exempt corpus) are carved out under rules.
Frequently asked
What is the tax on accreted income under the new Income Tax Act 2025?
Section 352: maximum marginal rate on fair market value of assets less liabilities, when a trust converts, merges or loses registration.
What is section 115TD called in the new Income-tax Act, 2025?
Section 115TD of the Income-tax Act, 1961 corresponds to Section 352 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).
What changed in section 115TD under the new Income Tax Act?
Renumbered; formula written explicitly. The Finance Act 2026 substituted the merger trigger (section 352 Table, Sl. No. 8).
Is section 115TD still applicable for FY 2025-26?
Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 115TD of the 1961 Act. Section 352 of the 2025 Act applies from tax year 2026-27.