ITR-A Form Explained AY 2026-27: FAQs for Successor Companies After Mergers and Demergers

ITR-A is the income tax return form for successor companies following a business reorganisation — a merger, demerger, or amalgamation approved by a court or NCLT. India recorded USD 123.8 billion in M&A deal value in 2025, an 18% jump from 2024. Introduced by Finance Act 2022 and refined by Finance Act 2023, ITR-A fills a statutory gap: how does a successor company correct past-year income records after an NCLT order retroactively transfers the predecessor’s business?

Key Takeaways

  • ITR-A is filed under Section 170A, inserted by Finance Act 2022 and clarified by Finance Act 2023.
  • The successor entity (not the predecessor) files ITR-A: one form per affected assessment year.
  • Deadline: within 6 months from the end of the month in which the court or NCLT order is issued.
  • ITR-A is a modified return filed in addition to the original ITR. It does not replace it.
  • No additional tax (no 25-50% slab like ITR-U). ITR-A is a regulatory compliance filing, not a voluntary correction.
  • CBDT notified ITR-A via Notification No. 110/2022 (Rule 12AD). No changes were made for AY 2026-27 specifically.

What is ITR-A and what is Section 170A?

Section 170A was inserted by Finance Act 2022 (effective April 1, 2022) and then substituted by Finance Act 2023 (effective April 1, 2023). The substitution explicitly added the Insolvency and Bankruptcy Code adjudicating authority to the list of recognised authorities alongside High Courts and NCLT. Section 170A applies to business reorganisations defined as amalgamation, demerger, or merger. It does not apply to slump sales, 100% share transfers, or other modes of business transfer.

Why was Section 170A introduced?

Before Section 170A, there was no statutory mechanism for filing modified returns when a court-approved reorganisation changed income attribution between predecessor and successor for past years. Consider what happens in a typical merger: the appointed date is April 1, 2021, but NCLT takes until January 2024 to pass the order. For three financial years, the predecessor filed returns and was assessed in the predecessor’s hands. After the NCLT order, that attribution is legally wrong. Section 170A gives the successor a formal instrument to bring the tax records in line with the legal reality.

Who exactly must file ITR-A?

The successor company files ITR-A, not the predecessor. In a merger, the amalgamated company (the surviving entity) is the successor. In a demerger, all resulting companies are successors for the income attributable to the businesses transferred to them. Each successor company files one ITR-A per affected assessment year.

The demerger filing count trap: If the NCLT order covers 4 AYs and there are 2 resulting companies, that’s 8 ITR-A filings, not 4. Build this into your reorganisation timeline from day one.

How many ITR-As must be filed?

One ITR-A must be filed for each assessment year where income attribution changes as a result of the reorganisation. The affected AYs are those between the appointed date and the year of the NCLT/court order. If the appointed date is April 1, 2021 and the NCLT order is passed in January 2024, the affected AYs are AY 2022-23, AY 2023-24, and AY 2024-25 — requiring three separate ITR-A filings.

How is ITR-A different from ITR-U?

  • ITR-A: Mandatory, no additional tax penalty, triggered by NCLT/court order, filed by successor company only, no 4-year cap (deadline is 6 months from order)
  • ITR-U: Voluntary, additional tax of 25-70%, triggered by taxpayer’s own initiative, filed by any taxpayer, 4-year window from end of AY

The two forms serve completely different purposes. ITR-U corrects self-identified errors. ITR-A implements a court-ordered income reallocation between entities.

What is the filing deadline for ITR-A?

ITR-A must be filed within 6 months from the end of the month in which the court or NCLT order is issued. For example, if the NCLT order is dated 15 March 2026, the deadline is 30 September 2026 (6 months from the end of March 2026). This is a hard deadline with no standard extension mechanism.

Does ITR-A apply to AY 2026-27?

ITR-A is not an annual form tied to a specific AY. It is triggered by a reorganisation event. A company whose NCLT order was issued in FY 2025-26 would file ITR-A for each affected prior AY during the 6-month window from the order date. CBDT made no changes to ITR-A specifically for AY 2026-27 — the form notified via Notification No. 110/2022 continues to apply.

Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. Consult a qualified Chartered Accountant or tax advocate experienced in corporate reorganisations for advice specific to your situation. All figures and dates are based on information available as of May 2026.