Section 13(2)(g) of the Income Tax Act
Income-tax Act, 2025: ss.332–355
Section 13(2)(g) falls under section 13 of the Income-tax Act, 1961, which corresponds to sections 332 to 355 of the Income-tax Act, 2025, the provisions on registered non-profit organisations.
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 13(2)(g) is Vanita Vishram Trust v. Chief Commissioner of Income (327 ITR 121), cited in 31 of the 53 judgments on BharatTax that turn on this section.
Leading authorities on Section 13(2)(g)
An institution must be established solely for educational purposes and not for commercial activities to be eligible for exemption under Section 10(23C)(vi). Pursuing objects other than education, or having objects that enable commercial activities, disqualifies the institution from such exemption.
An excess of income over expenditure does not, in itself, mean that an educational institution exists for profit, rather than solely for educational purposes. The primary purpose test is key.
The 'income' contemplated by Section 11 is the real income, not merely the assessed or assessable income, and income from property held under trust must be arrived at in a normal commercial manner. This implies that statutory deductions under Section 14 are not applicable when income from property held under trust is excluded.
