Exemption Claiming u/s 10 Amount Not Considered as Exemption in Computation in ITR 7

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InfoExemption Claiming u/s 10 Amount Not Considered as Exemption in Computation in ITR 7
If the exemption under Section 10 is not being considered properly in ITR 7 for an AOP Trust registered under Section 10(23C)(iiiab), follow these steps to resolve the issue:

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Steps to Correct the Issue:
Section 10(23C)(iiiab) – Exemption for Educational Institutions Funded by Government

This section provides income tax exemption for educational institutions under certain conditions. Below is an overview of Section 10(23C)(iiiab):

Eligibility Criteria:

  1. Type of Institution:

    • The exemption is applicable to any university or educational institution that exists solely for educational purposes.
    • The institution must not exist for the purpose of profit.

  2. Government Funding:

    • The institution must be wholly or substantially financed by the Government.
    • Substantial financing typically means that at least 50% or more of the institution's funding is provided by the Government.

  3. Purpose:

    • The institution should focus exclusively on educational purposes and not involve activities for generating profit.
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Step 1:
Steps to Ensure Exemption Under Section 10(23C)(iiiab) in ITR 7:

  1. Navigate to the Correct Section:

    • Go to Transaction >> Prepare ITR 7 >> Income in the software.

  2. Verify Total Receipts:

    • Enter the Total Receipts: ₹2,85,45,000.

  3. Calculate Government Grants:

    • Ensure that Government Grants are 50% or more of the total receipts:
      • 50% of Total Receipts = ₹1,42,72,500.
    • If the Government Grants meet or exceed this threshold, proceed to claim the exemption.

  4. Claim Exemption Under Section 10:

    • Go to the Exemption U/S 10 Amount field.
    • Enter the amount eligible for exemption under Section 10(23C)(iiiab).
    • The exemption will be considered only if Point No. 2 is satisfied (Government Grants must be at least 50% of Total Receipts).


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Step 2:
Generate the computation report to ensure the exemption is correctly applied and reflected under Exempt Income.


Hope This Helps.