Foreign institutes to get tax exemption only if they impart education here: SC

NEW DELHI: The Supreme Court has said that ���non-profit��� foreign educational institutions having branch offices in India can claim tax exemption only if they impart education in India. Such institutions have to be tested against India activites and not the calculation of income over expenditure to decide whether they qualify to be such organisation that are eligible for tax exemption, the apex court said in a ruling.

A bench comprising justice SH Kapadia and justice BS Reddy said: ���If the applicant wants exemption under Section 10(23C)(vi)(Income Tax Act, 1961) it has to impart education in India and only then it would be entitled to claim initial approval under that section.���

The court said that the concept of ���non-profit��� of such foreign controlled educational institutions has to be tested against the Indian activities. ���Our conclusion is that impartation of education must be in India if the applicant desires exemption under Section 10 (23C)(vi) and that excess/deficit of income over expenditure will not decide whether the applicant exists for profit or not,��� said Justice Kapadia.