Urgent
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
16 February 2013
income from hostels and bus facilities of an educational institutions is commercial or charitable activity?
Guest
Guest
(Expert)
16 February 2013
if they receive any fee from student then its commercial
Nikhil Kaushik
(Expert)
16 February 2013
I will prefer to disagree with CA Vivek.
Charging of fees can not be the sole ground for denial of charitable nature under income-tax. Charitable schools are allowed to charge fees. It is the overall nature of the activity that is relevant and the overall operations of the school should be directed towards needy students.
For a better idea of what constitutes running a school on commercial lines kindly refer to the ITAT judgment in the case of M/s. Rajah Sir Annamalai Chettiar Foundation Vs. The Director of income-tax (Exemptions)I.T.A.No. 1817/Mds/2010.
Thanks
Charging of fees can not be the sole ground for denial of charitable nature under income-tax. Charitable schools are allowed to charge fees. It is the overall nature of the activity that is relevant and the overall operations of the school should be directed towards needy students.
For a better idea of what constitutes running a school on commercial lines kindly refer to the ITAT judgment in the case of M/s. Rajah Sir Annamalai Chettiar Foundation Vs. The Director of income-tax (Exemptions)I.T.A.No. 1817/Mds/2010.
Thanks
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