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10(23c)(iiiad)

Vijay Kumar (Student) (44 Points)

17 October 2017

Sir my client is a private school registered as a education society and he also have certificate from district registrar certifying that not for profit,In FY TURNOVER 2015-16 WAS 97laksIn FY TURNOVER 2016-17 was 1.5crWhether tax audit applicable to education society?For 15-16 shall I directly claim 10(23c)(iiiad)?

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178226 Points)
Replied 17 October 2017

Any educational institution existing solely for educational purposes and not for purposes of profit (not falling under (iiiab) or (iiiad) of section 10(23) above) and approved by the Chief Commissioner or the Director General enjoys exemption under sub-clause (vi). The Central Board of Direct Taxes will authorise a particular Chief Commissioner of Director General for the Region to deal with such applications.

Without any such approval, it will be treated as business and tax audit will apply as per section 44AB.

Refer: Courtesy taxsutra/expert_article

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Vijay Kumar (Student) (44 Points)
Replied 17 October 2017

Sir how one can decide that falls under section 10(23c)(iiiad)?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178226 Points)
Replied 17 October 2017

The first class of educational institution dealt with in the Income tax Act is which is financed by the Government. Any income received on behalf of educational institutions existing solely for educational purposes and not for purposes of profit, and which is wholly and substantially financed by the Government is exempt under sub-clause (iiiab).

When the Government grant to such educational institution, exceeds fifty percent of the total receipts including any voluntary contributions of such educational institution, during the relevant previous year, the institution is said to be substantially financed by the Government as explained by way of Explanation after sub-clause (iiiac).

The second class of educational institution dealt with in the Income tax Act is dependent on quantum of annual receipts. Any income received on behalf of educational institutions existing solely for educational purposes and not for purposes of profit, if the aggregate annual receipts do not exceed Rupees one crore is also exempt under sub-clause (iiiad)