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Computation of income of educational institution

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Querist : Anonymous

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Querist : Anonymous (Querist)
06 January 2013 An educational institution is registered under Section 12AA of Income Tax Act.
Its Gross receipts are 30 Lacs
depreciation is 4.5Lac
It has defaulted in the payment of ESI.

How do we compute the income to be applied for exemption under Section 11 Of Income Tax act 1961.
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CA PARAS BAFNA

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CA PARAS BAFNA (Expert)
06 January 2013 The query is incomplete. Whatever expenditure has been made in running the educational institution may be shown as applied towards the objectives.
.
Depreciation is treated as an application.
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Default will become an application only when the amount involved, will be paid.
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15% of 30 lac i.e. 4,50,000/- can be accumulated. Meaning thereby , if the institution has applied 25,50,000/- then by virtue of Section 11, it is not required to pay any tax.
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