TDS deduct on payment to entity Covered U/s 10(23C)(iiib)

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Karamveer Singh (Querist)
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05 January 2023 If we are making a Payment to an entity whose income is exempt under section 10(23C)(iiib). Then can we be required to deduct TDS on payment to the such entity? If we are exempt from the deduction of TDS then please provide a section or any notification/circular if available. Thank You in advance.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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05 January 2023 Unless the supplier has provided you any tds exemption certificate, or is under exemption list in IT portal, you have to deduct TDS under law.

Ram Avtar Singh

Ram Avtar Singh (Expert)
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06 January 2023 Section 10(23C) relating to educational institution vis – a – vis section 11 exemption for such institution
Any income of a university or other educational institution existing solely for educational purposes and not for purposes of profit was exempt u/s.10(22). The Finance (No. 2) Act, 1998, while deleting S. 10(22) and amending S. 10(23C), has classified educational institutions into three categories.

1. S. 10(23C)(iiiab) provides that any income of any university or other educational institution existing solely for educational purposes and not for purposes of profit is eligible for exemption, provided it is wholly or substantially financed by the Government.

2. Where the educational institution is not financed by the Government and the aggregate annual receipt of the university or educational institution does not exceed Rs.100 lakhs, then any income of such educational institution or university is also exempt, subject to the condition that it exists solely for educational purposes and not for purposes of profit [S. 10(23C) (iiiad)].

2. Any university or other educational institution existing solely for educational purposes and not for purposes of profit and which is not financed wholly or substantially by the Government and the aggregate annual receipt of such institution exceeds Rs.100 lakhs, then the income will be exempt from tax, subject to approval by the prescribed authority. [S. 10(23C) (vi)].

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