Education institute by which act.

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saravanan natarajan (Querist)
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13 March 2014 Dear sir

I am running "Sakthi Educational Institute" in Tamilnadu. Around 50 students are studying and writing their Correspondence exam. We are conducting only correspondence cource and which is authorised study centre by University.

My students are paying fees locally and more than 30 students from abroad. They are paying fees through on-line from abroad.

My question is
1. Whether I have to register my institute in (a) propritor act or (b) Partnership act or (c)Trust act ( because foreign money is coming to my account (FCRA Act).

2. Bank account in savings a/c or current account or any other?

3.Which tax is applicable
1. Income tax
2. sales tax ( TIN number is necessary or not)
3. Service Tax ( because we are not doing sales, it is purely service activity)

Please guide me.

Thanks and regards
N.saravanan

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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13 March 2014 1. Register as a Society under the Society Registration Act

2. Income tax is applicable. However, you can apply for registration under Section 12AA which will enable you to claim exemption u/s 11 & 12.
The whole income will be exempt from tax, subject to few conditions.

3. VAT is NOT applicable since you are NOT selling any article or thing.

4. Service tax is NOT applicable to educational institutions.