A S BANKA ADVISORS

If your startup runs a foundation, backs a charitable trust, or routes CSR spend through an implementing agency, a quiet CBDT circular from July matters more than it looks. Circular No. 06/2026, dated 2 July 2026, gives a one-time reprieve to trusts and institutions that filed Form 10AB late for their Section 80G renewal. Here is what it does, and what you should actually do about it.

What the circular changes

Under the current registration regime, an institution holding provisional or existing 80G approval must apply for regular approval in Form 10AB at least six months before that approval expires. For a large cohort of trusts whose approval was expiring on 31 March 2026, that meant a filing due date of 30 September 2025. Many missed it, whether through genuine hardship, portal problems, or simple oversight, and filed only later in the year. A strictly read late filing can be rejected outright, and a rejection puts the entire 80G eligibility at risk.

Circular 06/2026 removes that risk for a defined window. Using the power to condone delay under Section 119(2)(b) of the Income-tax Act, 1961 (read with the transitional Section 536(2) of the Income-tax Act, 2025), the CBDT has directed that Form 10AB applications for 80G approval filed electronically between 1 October 2025 and 31 March 2026 are treated as filed in time. Applications already rejected only because they were late in that window are treated as condoned and must be reconsidered on merits. The jurisdictional Principal Commissioner or Commissioner must dispose of these applications by 31 December 2026.

Why an 80G lapse is so expensive

Section 80G approval is what lets a donor claim a deduction (generally 50 percent of the donation, subject to the qualifying-amount ceiling) for money given to an approved institution. Lose it, and three things happen almost immediately. Donors walk away, because corporate and HNI giving is conditioned on a valid 80G certificate. The CSR compliance trail weakens, because companies routing CSR spend to implementing agencies rely on those agencies holding valid registrations. And re-application is slow: a fresh provisional-plus-regular cycle can run for months, during which the institution operates without the certificate donors expect. By converting a fatal late filing into a condoned one, the circular protects continuity of approval instead of forcing the trust back to square one.

Read it period-aware: the 1961 Act and the 2025 Act

This is where precision matters. The Income-tax Act, 2025 is in force from 1 April 2026 (Tax Year 2026-27 onward), while the Income-tax Act, 1961 continues to govern FY 2025-26, earlier years, and pending matters. The circular is drafted to work across that transition. The substantive approval sits under Section 80G(5) of the 1961 Act, with Section 133(1)(b) of the 2025 Act as the successor provision. The condonation is exercised under Section 119(2)(b) of the 1961 Act, read with the saving and transitional Section 536(2) of the 2025 Act, so the relief stays valid as the new Act takes over. If you are drafting a covering letter to the Commissioner, cite the 1961 Act provisions for the substantive approval and note the 2025 Act successor, rather than treating either Act as the sole current law.

What trustees and their advisors should do now

• Pull the acknowledgement. Confirm the exact date Form 10AB was filed on the e-filing portal. If it falls between 1 October 2025 and 31 March 2026, you are in the window.
• Check the status. If the application was rejected only for delay, it must be reopened. Write to the jurisdictional office referencing the circular and ask that it be restored and decided afresh.
• Build the merits file. Condonation cures the delay, not the substance. Keep the trust deed, prior approval orders, activity reports, audited accounts and the Form 10B or 10BB audit report ready, because the Commissioner now decides on merits.
• Diarise 31 December 2026. The department must dispose of covered applications by year end. Chase well before December.

One caution worth repeating: condonation is not automatic approval. Each application is still decided on merits, so a weak substantive file can still be refused. And the discipline that outlasts this circular is simple. For any approval expiring in a future year, file Form 10AB at least six months ahead, so you never depend on a condonation again. A rescue is not a plan.

Download the full carousel PDF for the old-versus-new deadline table, the compliance checklist, and the key-dates timeline.

Navigating an 80G renewal, a delayed Form 10AB, or a rejection that needs to be reopened before the 31 December 2026 deadline? Get expert guidance. Book a call: https://calendly.com/asbanka-info/30min. CA Adityavikram Banka, Founder, A S Banka Advisors Private Limited.