Rules 2026

Rule 327 of the Income-tax Rules, 2026

Rule 327 — Application for approval.

Where this rule sits

What this rule does

The rule prescribes the form for one application. The application for approval of a gratuity fund required to be furnished under paragraph 4(1) of Part B of Schedule XI to the Act shall be made in Form No. 188 and shall be verified in the manner indicated in that Form.

Why it is there

Paragraph 4(1) of Part B of Schedule XI requires an application for approval of a gratuity fund but does not prescribe its shape or how it is to be verified. The rule fixes both, so that every application for approval comes in one settled format.

Who it applies to

An employer or trustees applying for approval of a gratuity fund under paragraph 4(1) of Part B of Schedule XI to the Act

The forms it prescribes

Form No. 188 — application for approval of a gratuity fund under paragraph 4(1) of Part B of Schedule XI

What this means in practice

Verification is not a formality left to the applicant's choice: the rule requires it in the manner indicated in Form No. 188, so an application signed otherwise is not verified as required. The rule prescribes the form only; the conditions for approval and the consequences of it are in Part B of Schedule XI and not here.

An example

Illustrative only, and invented for this page. The figures are chosen to show the requirement biting, not taken from any real matter.

An employer setting up a gratuity fund under an irrevocable trust applies for approval by filing Form No. 188, verified in the manner the Form indicates, as required by paragraph 4(1) of Part B of Schedule XI.

Where you meet this rule

A reader meets it once, at the point of applying for approval of a newly constituted gratuity fund.

The words themselves

shall be made in Form No. 188 and shall be verified in the manner indicated therein

Rule 327, Income-tax Rules, 2026.

What people get wrong

Applying by letter or in another form. The rule prescribes Form No. 188.
Signing without the prescribed verification. The rule requires verification in the manner indicated in the Form.
Looking in the rule for the conditions of approval. They are in Part B of Schedule XI to the Act.

What this page does not tell you. It does not reproduce the rule. Everything above was written from the rule’s own text as the Income Tax Department publishes it — the text is here. A rule is subordinate legislation: it prescribes the method, the form or the period, and it cannot enlarge the charge the section imposes. Where a figure matters, read the sub-rule it comes from.