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Educational Institution Audit and Exemption

This query is : Resolved 

05 December 2021 There is a registered society being educational institution which is registered u/s 12AA of the Income Tax Act, 1961 is running three schools whose total gross receipt is Rs.45 lacs and is having surplus of Rs.14 lacs ( the applicaiton of income is lesser than 85% of gross receipts)during the year 2020-21, is also eligible to claim exemption u/s 10(23C)(iiiad) whose accounts have been audited. Whether audit report in Form 10B or Form 10BB is required or only independent Auditor's report shall suffice to claim exemption u/s 10(23C)(iiiad). If the audit report is not in Form 10B or Form 10BB then how it shall be uploaded on ITD portal ? Kindly guide.

06 December 2021 As it's registered society being educational institution which is registered u/s 12AA of the Income Tax Act, 1961, file ITR 7 with 10B audit report.

06 December 2021 If the institution goes for exemption u/s 11 then it would be liable to tax on Rs.7.25 lacs as the amount applied to charitable purposes is lesser than 85% whereas if it opts for exemption u/s 10(23C)(iiiad) as its gross receipts are lesser than 1 crore then there won't be any tax liability. Form 10BB is to be filed in the case of institution registered u/s 10(23C). Since the gross receipts did not exceed 1 crore the institution did not get itself registered u/s 10(23C). So in my view filing ITR claiming exemption u/s 11 would not be appropriate as it would result in tax liability whereas claiming exemption u/s 10(23C)(iiiad) would result in Zero tax. Please advise. Thanks

07 December 2021 Yes, you are right provided you are not registered under section 12AA.
Cancel registration under section 12AA.

07 December 2021 I understand that even if the institution was registered u/s 12AA if it fulfils conditions of s. 10(23C)(iiiad) then it has the option till AY 2021-22. From AY 2022-23 however, an institution may be registered either u/s 12AB or 10(23C) and not both. Therefore, I feel that the trust though registered u/s 12AA may at its option go for exemption u/s 10(23C)(iiiad) if it satisfies the conditions. My concern is with respect to the form of Audit Report. If it claims exemption u/s 10(23C)(iiiad) then there is no prescribed for of Audit Report as Form 10B is for trust registered u/s 12A and Form 10BB is for those who are registered u/s 10(23C)(vi).

07 December 2021 No audit report required in case of 10(23C)(iiiad).

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