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Audit requirement for schools

rocky (accountant) (953 Points)

18 February 2024

2 schools for profit purpose, one gross receipts 95 lakhs in a year, 2nd one has gross receipts of rs. 1.25 CR. both different organisations.. is audit compulsory?

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CA Rashmi Gandhi (Chartered Accountant) (86461 Points)
Replied 18 February 2024

EDUCATIONAL INSTITUTIONS NOT REGISTERED U/S. 12AB / NOT APPROVED U/S. 10(23C)(vi) BUT ARE ELIGIBLE FOR EXEMPTION U/S. 10(23C)(iiiad)
(1) This exemption is available only for educational institutions whose aggregate annual receipts are not more than Rs. 5 Crore. This limit is common limit for all the educational institutions run by a single entity.
(2)This exemption may be available only in cases where the educational activities are being conducted under institutional format (e.g., trust, society, section 8 companies etc.). Where educational activities are being conducted under any other form (e.g., individual, HUF, non section 8 company, LLP, partnership firms etc.) this exemption may not be available.
(3) This exemption is available only for educational institutions whose object is not to earn profit. However, there may not be any ineligibility for exemption merely because surplus has aroused unintentionally.
(5) In such cases no tax audit in form no. 10B / 10BB is required.
(6) The tax audit u/s. 44AB is also not required even if the annual gross receipts from educational (charitable) activities exceeds Rs. 1 Cr.

If you registered under societies act, then audit as per societies act is compulsory

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