10(23c)(iiiad)

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

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)