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Gift of immovable property to an educational institution not covered u/s. 10(23)(c ) or 12a

SADHU SUBRAMANYAM PANTH (CHARTERED ACCOUNTANT) (59 Points)

13 December 2018

Pl. clarify the application of section 56(2)(x) of income tax act to an association of persons not covered under 10(23)(C) not holding 12A Regn. The gift of immovable property made in May 2017 is by the members of governing body to the AOP and the gifted property is such that without which the Educational institution will loose recognition. In view of paralel amendment in Sec. 2(24)(xviia) can there be any scope for exemption from treatment as deemed gift?

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3 Replies

Umesh Mhatre (owner) (299 Points)
Replied 14 December 2018

No.

It will be taxable gift.

6 Like

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sieve softech (2 Points)
Replied 06 April 2023

Hi,

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Since Education should not be considered as business, people who want to start an educational institution should consider a not-for-profit business model rather than a for-profit business model because it satisfies the owner’s interests and would act in the public interest. It is very hard for these not-for-profit organizations to raise funds unless it is sponsored by a rich person who wants to put money in a trust for the benefit of the society. Not-for-profit institutions will also face difficulties to raise funds when there is an economic downturn or when unemployment rates are high. However, the benefits that these Non-Profit Organizations receive are far more in number than the restrictions that they face.

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riya gupta (2 Points)
Replied 13 January 2024

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