06 July 2024
Yes, educational institutions with a turnover above 2 crores can still file their income tax returns (ITR) and claim exemption under section 10(23C)(iiiad) of the Income Tax Act, 1961. Here are some key points to consider:
1. **Section 10(23C)(iiiad) Exemption:** This section provides exemption from income tax to educational institutions established solely for educational purposes and not for purposes of profit.
2. **Conditions for Exemption:** - The institution must be approved by the prescribed authority (like University Grants Commission, All India Council for Technical Education, etc.). - It should apply its income, or accumulate it for application, solely for educational purposes. - The institution should not be for the benefit of any particular religious community or caste.
3. **Filing Income Tax Return:** Even though exempt under section 10(23C)(iiiad), educational institutions are required to file their income tax returns if their total income exceeds the maximum amount not chargeable to tax (currently ₹2,50,000 for individuals below 60 years).
4. **Form of Return:** The educational institution should file its income tax return using Form ITR-7, which is specifically meant for entities claiming exemption under sections 10, 11, and 12.
**Tax Audit Requirement:** If the total income of the educational institution exceeds the threshold limit that requires tax audit (currently ₹1 crore for educational institutions), a tax audit under section 44AB might be required.
**Compliance:** Ensure that all required documents and declarations related to the exemption under section 10(23C)(iiiad) are maintained and available for scrutiny by tax authorities if needed.
It's advisable to consult with a tax professional or chartered accountant who can provide specific guidance based on the institution's financial details and ensure compliance with applicable tax laws and regulations.
CAclubindia
