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SECTION 10 FOR EDUCATIONAL INSTITUTE

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18 May 2021 a society hold a certificate under 10(23C)(vi), can it claim 10(23C) even if receipts cross 5 crores. please also clear 14th proviso under 10(23C)

11 July 2024 Under Section 10(23C) of the Income Tax Act, certain entities such as educational institutions, hospitals, etc., can claim exemption from income tax if they fulfill specific conditions. Here’s how it applies to societies holding a certificate under 10(23C)(vi):

1. **Exemption under Section 10(23C)(vi)**: Societies (including educational institutions and hospitals) can claim exemption under Section 10(23C)(vi) if their income is applied solely for educational or charitable purposes and they apply for and receive a certificate from the prescribed authority (such as the Director of Income Tax (Exemptions)).

2. **Receipts Crossing 5 Crores**: The proviso to Section 10(23C) mandates that entities like educational institutions and hospitals must apply for re-validation of their exemption certificates if their gross receipts in any previous year exceed Rs. 1 crore (from FY 2020-21 onwards, this limit has been increased to Rs. 5 crores due to amendments).

3. **14th Proviso under Section 10(23C)**: The 14th proviso under Section 10(23C) states that entities holding certificates under clauses (iiiab), (iiiac), (iiiad), (iiiae), (iiiad) or (iiiag) of Section 10(23C) are required to apply for re-validation of their exemption certificates if their gross receipts in any previous year exceed Rs. 5 crores.

**Specific Points Regarding Societies under 10(23C)(vi)**:
- Societies holding a certificate under 10(23C)(vi) can continue to claim exemption under this section even if their receipts cross Rs. 5 crores in a previous year, provided they fulfill all other conditions.
- However, they must ensure compliance with the requirements of the 14th proviso, which includes applying for re-validation of their exemption certificate when their gross receipts exceed the specified threshold.

In summary, while societies holding a certificate under 10(23C)(vi) can claim exemption under this section, they need to be mindful of the re-validation requirement if their gross receipts exceed Rs. 5 crores in any previous year, as per the 14th proviso. This ensures continued eligibility for exemption under Section 10(23C) of the Income Tax Act.



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