budget-2021

Increase in exemption limit u/s 10(23C)(iiiad) and (iiiae) of Income tax Act to Rs. 5 crores

Increase in exemption limit u/s 10(23C)(iiiad) and (iiiae) of Income tax Act to Rs. 5 crores

Clause (23C) of section 10 of the Act provides for exemption of income received by any person on behalf of different funds or institutions etc. specified in different subclauses.


Sub-clauses (iiiad) of clause (23C) of the section 10 provides for the exemption for the income received by any person on behalf of university or educational institution. The exemptions under are available subject to the condition that the annual receipts of such university or educational institution do not exceed the annual receipts as may be prescribed.

Similarly, sub-clauses (iiiae) of clause (23C) of the section provides for the exemption for the income received by any person on behalf of hospital or institution as referred to in that sub-clause. The exemptions under the said sub-clause are available subject to the condition that the annual receipts of such hospital or institution do not exceed the annual receipts as may be prescribed.

The presently prescribed limit for these two sub-clauses is Rs 1 crore as per Rule 2BC of the Income-tax Rule.

In order to provide benefit to small trust and institutions, the Budget 2021-22 has proposed that the exemption under sub-clause (iiiad) and (iiiae) shall be increased to Rs 5 crore.

This amendment will take effect from 1st April, 2022 and will accordingly apply to the assessment year 2022-23 and subsequent assessment years.

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