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Eligible persons under section 10(23c)

Shreyas (Student) (23 Points)

06 April 2018

Who are the eligible persons who can claim deductions under section 10(23C).

Can an Association of Persons (AOP) claim deduction under section 10(23C)iiiad?

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CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 06 April 2018

In order to claim exemption under section 10 (23C) (iv) / (v) / (vi) / (via), the fund or trust or institution or any university or other educational institution or any hospital or other medical institution case may be, had to comply with the following conditions:

1. An application in Form No. 56 (for claiming exemption under section 10 (23C) (iv) and (v) or continuance thereof) and in Form No. 56D (for claiming exemption under section 10 (23C) (vi) and (via) or continuance thereof) has filed with prescribed authority, i.e., Commissioners of Income-Tax (Exemptions).

2. It should furnish such documents (including audited annual accounts) or information, which the specified authority, ie, Commissioners of Income-tax (Exemptions) may be considered necessary in order to satisfy themselves about the fundamentals of such fund or trust or institution or any university or other educational institution or any hospital or other medical institution, as the case may be.

3. It should apply its income, or accumulates it for application, wholly and exclusively to the objects for which it is established and in a case where its income of fifteen per cent more than or on April 1, 2002 , the period of the accumulation of the amount of fifteen percent of its income will not be more than five year

4. Funds should not be invested or deposited for any period during the previous year otherwise than in any one or more of the forms / modes as specified in section 11 (5). However, this condition is not applicable in respect of the following: -

(i) 1st day of June, 1973 as any asset which forms part of the corpus of the fund, trust or institution or any university or other educational institution or any hospital or other medical institution;

(ii) Equity shares of a public company, held by any university or other educational institution or any hospital or other medical institution where such equity shares form any university or other educational institution or any hospital or other medical institution of corpus the 1st day of June, 1998

(iii) 1st day of March, 1983 before Debentures of a company acquired by the fund, trust or institution or any university or other educational institution or any hospital or other medical institution;

(iv) any accretion to the shares, forming part of the corpus of the fund mentioned in point no. (i) and (ii), by way of bonus shares allotted to the fund, trust or institution or any university or other educational institution or any hospital or other medical institution;

(v) voluntary contributions received and maintained in the form of jewelery, furniture or any other article as the Board may, by notification in the official gazette, specify,

5. For claiming exemption under section 10 (23C) (iv) and (v), the fund, trust or institution, as the case may be, should disinvest by March 30, 1993, all the investment made before April 1, 1989, Other than in any one or more of the forms or modes specified in section 11 (5).

6. For claiming exemption under section 10 (23C) (vi) and (via), the university or other

Education institution or any hospital or other medical institution, as the case may be, should disinvest by March 30, 2001, all the investment made before June 1, 1998, otherwise than any one or more of the forms or modes (5).

7. If taxable income [before giving exemption under section 10 (23C)] exceeds the exemption limit, the institution should get books of account audited in Form No. 10BB and audit report should be submitted along with return of income.

8. Where any fund, trust or institution or any university or other educational institution or any hospital or other medical institution, as the case may be, the claim for the exemption claim for approved or notified.