Employee welfare funds seeking approval under the Income-tax Act, 2025 now use Form 180 through the Income Tax e-Filing portal.

The Income Tax Department states that Form 180 applies to qualifying employee welfare funds constituted as trusts that receive periodical employee subscriptions, use their income solely for employee welfare and invest in the prescribed modes under section 350. Approval is granted by the Principal Commissioner or Commissioner and can remain valid for up to three tax years, after which continued approval requires a fresh application.

The electronic application requires information about the fund, its objects, classes of beneficiaries, subscriptions and investment/deposit modes, together with supporting documentation and electronic verification.

Business impact

Companies maintaining employee welfare structures should not treat the fund independently from the organisation’s broader payroll, treasury and governance controls.

Before applying, management should be able to demonstrate that the trust structure, employee contributions, use of income and investment pattern are consistent with the statutory conditions.

For finance teams, the three-tax-year approval period also makes renewal tracking important: the approval should sit in the organisation’s tax calendar rather than only in the trust’s historical records.

Mardia Global Insight: Employee-benefit structures increasingly require tax, governance and investment controls to operate together.

Mardia Global | Tax & Accounting Insights for Businesses in India