Tax Exemption Rules for Educational and Medical Institutions Under Section 10(23C): Key Criteria and Compliance Requirements
Section 10(23C) of the Income Tax Act provides tax exemptions for certain universities, educational institutions, hospitals, and other medical institutions that are either wholly or substantially financed by the government and exist solely for educational or philanthropic purposes without profit motives. Institutions qualify as substantially financed if government grants exceed 50% of total receipts. Exemptions apply to entities with annual receipts below specified thresholds. The exemption is not applicable if receipts exceed 5 crore. Conditions for maintaining exemption include applying income for intended purposes, not exceeding specified accumulation limits, and adhering to investment restrictions. Authorities may withdraw exemptions if conditions are violated.