| Question And Answer | |
|---|---|
| Subject: | SEC 10(23C) and income of Educational trust |
| Category: | Income-Tax |
| Querist: | Manali |
| Answered by: | KSA Legal Chambers |
| Tags: | Educational Institution, Section 10(23C) |
| Date: | August 16, 2023 |
Assessee is trust having registration u//Sec 12 A as well as recognition u/sec 80G. The trust is wholly for educational purpose and running school. There is no Govt grant to school. The school is also having income from Hostel fees from the students of school which are staying in hostel. Interest on Fixed deposit invested out of surplus .
Whether trust should continue claiming exemption u/Sec. 11 as it has valid registration u/Sec 12 A or trust should apply for registration U/sec. 10(23C)
Whether latest supreme court decision in case of New Noble education society will have impact on trust computation.
Pl guide
Please refer section 10(23C) (iiid ). If the aggregate annual receipts does not exceed five crores the assessee can make an application under section 10(23C) of the Act subject to other conditions.
As the charitable organization is registered under section 12A of the Act as well as section 10(23C) of the Act, the organization can choose to compute its income as a charitable organization or as an educational institution. It is advisable to consistently follow one method of computation and file the tax audit report accordingly (Form 10B or Form 10BB). Whether to opt for a charitable organization status or as an educational institution is at the discretion of the management and should be decided based on which is beneficial for the interest of the organization.