Section 352 — Tax on accreted income

(1) Every specified person shall, in addition to the income-tax chargeable
in respect of his total income, be liable to pay additional income-tax on
accreted income at the maximum marginal rate in any of the cases specified in
column B(i) and (ii) of the Table in sub-section (4).
(2) The accreted income referred to in sub-section (1) shall be computed using the
following formula:—
A = B – C
where,—
A = Accreted income;
B = Aggregate fair market value of the total assets of the specified
person, as on the date specified, in column C of the Table in
sub-section (4), computed in accordance with such method
of valuation, as may be prescribed;
C = Total liability of such specified person, as on the date specified
in column C of the said Table, computed in accordance with
such method of valuation, as may be prescribed.
(3) The accreted income, computed as per the provisions of sub-section (2) shall be
reduced by such amount of accreted income as is attributable to specified assets,
and liabilities, if any, related to such assets.
(4) The specified person and the principal officer or trustee of such specified per -
son shall be liable to pay the tax on accreted income to the credit of the Central
Government within fourteen days from the due date specified in column D of the
Table below:
TABLE
Sl.
No.
Case Specified date Due date for the
payment of tax on
accreted income
A B C D
(i) (ii)
1. The registration
granted to the
specified person
under any speci -
fied provision has
been cancelled or
withdrawn.
The specified per-
son has preferred
an appeal against
the order of can -
cellation.
The date of the or-
der cancelling the
registration.
Date of receipt of
the order in any ap-
peal, confirming
the cancellation
of the registration,
by the specified
person.
2. The registration
granted to the
specified person
under any speci -
fied provision has
been cancelled or
withdrawn.
The specified per-
son has not pre -
ferred an appeal
against such order
of cancellation.
The date of the or-
der cancelling the
registration.
The date on which
the period for fil -
ing appeal under
section 362 against
the order cancel -
ling the registra -
tion expires.
3. ( a) The speci -
fied person
has adopted
or undertak-
en modifi -
cation of its
objects dur -
ing any tax
year; and
( b) such modi -
fied objects
do not con -
form to the
conditions
of registra -
tion.
The specified per-
son has not ap -
plied for fresh reg-
istration under any
specified provision
in such tax year.
The date of adop -
tion or modifica -
tion of any object.
The end of such
tax year.
4. ( a) The speci -
fied person
has adopted
or undertak-
en modifi -
cation of its
objects dur -
ing any tax
year; and
( b) such modi -
fied objects
The specified per-
son has applied for
fresh registration
under any speci -
fied provision in
such tax year and
where such appli-
cation has been re-
jected and appeal
has been preferred
against such order
of rejection.
The date of adop -
tion or modifica -
tion of any object.
The date of receipt
of the order in
any appeal, con -
firming the can -
cellation of the
registration by the
specified person.
Sl.
No.
Case Specified date Due date for the
payment of tax on
accreted income
A B C D
(i) (ii)
do not con -
form to the
conditions
of registra -
tion.
5. ( a) The speci -
fied person
has adopted
or undertak-
en modifi -
cation of its
objects dur -
ing any tax
year; and
( b) such modi -
fied objects
do not con -
form to the
conditions
of registra -
tion.
The specified per-
son has applied for
fresh registration
under any speci -
fied provision in
the said tax year
and where such
application has
been rejected and
no appeal has been
preferred against
such order of re -
jection.
The date of adop -
tion or modifica -
tion of any object.
The date on which
the period for fil -
ing appeal under
section 362 against
the order cancel -
ling the registra -
tion expires.
6. The specified per-
son fails to make
an application as
per the provisions
of—
( a) sub-clause
(i) or ( ii) or
(iii) of the
first proviso
to section 10
(23C) of the
Income-tax
Act, 1961 (43
of 1961); or
( b) sub-clause
(i) or ( ii) or
(iii) of sec -
tion 12A(1)
(ac) of the
The period spec -
ified in the re -
spective clause
or sub-clauses or
Table, as the case
may be, expires
in the tax year
in which the said
application is to
be made.
The last date for
making an appli -
cation for regis -
tration.
The end of such
tax year.
Sl.
No.
Case Specified date Due date for the
payment of tax on
accreted income
A B C D
(i) (ii)
Income-tax
Act, 1961 (43
of 1961); or
( c) as specified
in section
332(3) (Ta -
ble: Sl. No.
3, 4, 5 or 7).
7. Where a specified
person converts
itself into a form
which is not eligi-
ble for grant of reg-
istration during
any tax year.
The date of such
conversion.
The end of such
tax year.
68[8. The specified per -
son has merged
with any other—
The date of merger. The date of merger.]
(a) entity oth -
er than a
registered
non-profit
organisa -
tion; or
(b) registered
non-profit
organisation
having
68. Substituted by the Finance Act, 2026, w.e.f. 1-4-2026. Prior to its substitution, Sl. No. 8 read
as under :
“8. The specified person has merged with
any other entity other than a registered
non-profit organisation having the
same or similar objects and the said
merger does not fulfil such conditions,
as may be prescribed.
The date of
merger.
The date of
merger.”
Sl.
No.
Case Specified date Due date for the
payment of tax on
accreted income
A B C D
(i) (ii)
objects same
or similar
to it but the
said merg -
er does not
fulfil such
conditions,
as may be
prescribed;
or
(c) registered
non-profit
organisation
that does not
have same or
similar ob -
jects.
9. The specified
person has failed
to transfer upon
dissolution, all
its assets to any
other registered
non-profit organ -
isation within
twelve months
from the end of the
month in which
the dissolution
takes place.
The date of disso -
lution.
The date on which
such period of
twelve months ex-
pires.
(5) The payment of tax on the accreted income by the specified person under this
section shall be deemed as the final payment of tax in respect of the said income
and no further credit therefor shall be claimed by, or any deduction be allowed to,
the specified person or any other person in respect of the amount of tax so paid
under any other provision of this Act.
(6) Where the specified person, or the principal officer or trustee of such specified
person, fails to pay the whole or any part of the tax on the accreted income within
the time allowed under sub-section (4), such specified person, principal officer or
trustee shall be liable to pay simple interest, computed as per the following formula:—
I = 1% of (T × P)
where,—
I = interest;
T = tax on accreted income; and
P = number of months beginning on the date immediately after the last
date on which such tax was payable and ending with the date on
which the tax is actually paid including part thereof.
(7) All the provisions of this Act shall apply for the collection and recovery of
income-tax in respect of the amount of tax payable by the specified person,
principal officer or trustee and the following persons shall be deemed to be assessee
in default:—
( a) the specified person and principal officer or the trustee of such specified
person;
( b) the person to whom any asset forming part of the computation of accret-
ed income under sub-section (2) has been transferred, where the tax on
accreted income is payable under the cases specified in sub-section (4)
(Table: Sl. No. 9).
(8) Subject to the provisions of sub-section (7), the liability of the person referred
to in clause ( b) of the said sub-section shall be limited to the extent to which the
asset received by him is capable of meeting the liability.