Literacy is the key for sustained growth in an developing economy. We have in depth experience, working with some of the premier educational institutions in India which help in shaping the future of millions of people joining the Indian work force. At the Firm, we work hand-in-hand guiding and helping our Clients address strategic issues, including the funding strategy, establish best practices – improving operating inefficiencies, plugging leakages, improving management efficiency allowing for growth based on organizational effectiveness.

We work with:

  • Primary & Secondary Schools
  • Higher Education Institutions
  • Colleges- Private & Government funded
  • Vocational & Training Institutions

Major Fiscal Incentives for Education Sector

Various fiscal incentives are provided by the Government of India for promoting investment in the Education sector. Some of the key incentives are outlined below:

Income Tax

Income Tax Exemptions available to certain Educational Institutions under Section 10(23C) of the Income Tax Act, 1961 and comparison of the same with exemption available under Section 11.

Government Educational Institutions: Income received by any university or educational institution existing solely for educational purposes and not for purposes of profit, and which is wholly or substantially financed by the Government is fully exempt from tax vide Section 10(23C)(iiiab). Hence, a Government educational institution is fully exempt from income tax without any separate approvals etc. as long as it is not for profit purpose.

Non-government Educational Institutions: The exemption for non-government (private) educational institutions depends upon the aggregate annual receipts of the university / educational institution

Educational Institutions with annual receipts exceeding Rs. 1 crore: Exemption in the case of an educational institution having receipts exceeding Rs. 1 crore is governed by Section 10(23C)(vi) which states that income earned by any university or other educational institution existing solely for educational purposes and not for purposes of profit, other than those mentioned in sub-clause (iiiab) or sub-clause (iiiad), shall be exempt if they are approved by the prescribed authority. Thus, where the aggregate receipts of the institution exceeds Rs. 1 crore, the institution needs a separate approval for claiming the exemption u/s 10(23C).

GST on Education

  1. Income from education is wholly exempt from GST if a charitable trust is running a school, college or education institution for abandoned, orphans, homeless children, physically or mentally abused persons, prisoners or persons over the age of 65 years or above residing in a rural area.
  2. Government or local authority or governmental authority carrying on the activity of education is exempted from GST as this is not included in the ambit of supply of services. For Example – Government schools / Municipal schools.
  3. Education provided by below are also Exempted Under GST:

a. National skill development corporation set up by the Indian government

b. National skill development corporation approved sector skill councils

c. National skill development corporation approved assessment agencies

d. The national skill development programs approved by NSDC Vocational skill development program approved under national skill certification and monetary reward scheme

e. Any scheme implemented by NSDC with training partners

4. Exemption has also been granted to the services provided by the IIM–

a. 2 year full-time residential PG programs in Management for Post Graduate Diploma in Management, admission in which is granted via CAT

b. Fellowship programs in Management

c. 5 Year Integrated Programs in management studies (but excludes the Executive Development Program).

Scheme by Govt of India to promote the Education

Ø  Interest-free loans for all IIT students under ‘Vidyalakshmi’ scheme

  • Samagra Shiksha: proposed to treat school education holistically without segmentation from pre-nursery to Class 12. Samagra Shiksha – an overarching programme for the school education sector extending from pre-school to class 12 has been, therefore, prepared with the broader goal of improving school effectiveness measured in terms of equal opportunities for schooling and equitable learning outcomes. It subsumes the three schemes of Sarva Shiksha Abhiyan (SSA), Rashtriya Madhyamik Shiksha Abhiyan (RMSA) and Teacher Education (TE).
  • Mid Day Meal Scheme: Mid Day Meal Scheme under which every child in every Government and Government aided primary school was to be served a prepared Mid Day Meal with a minimum content of 300 calories of energy and 8-12 gram protein per day for a minimum of 200 days. The Scheme was further extended in 2002 to cover not only children studying in Government, Government aided and local body schools, but also children studying in Education Guarantee Scheme (EGS) and Alternative & Innovative Education (AIE) centres.
  • Infrastructure Development in Minority Institute(IDMI): IDMI has been operationalisedto augment Infrastructure in Private Aided/Unaided Minority Schools/Institutions in order to enhance quality of education to minority children.