Whether since section 10(22) does not impose any restriction regarding mode of investments of funds, such institutions are not required to invest their funds in modes specified under section 11(5)
1. Under section 10(22 ) of the Income-tax Act, any income of a University or other educational institution, existing solely for educational purposes and not for purposes of profit, is exempt from tax.
2. The Board have received representations from various institutions which fulfil the conditions laid down under section 10(22) of the Act, but are denied exemption because their funds are not invested in accordance with the provisions of section 11(5) of the Act. It is hereby clarified that since section 10(22) does not impose any restriction regarding mode of investment of funds, such institutions are not required to invest their funds in the modes specified under section 11(5) of the Income-tax Act. This clarification will not apply to the institutions seeking exemption under section 11 of the Act.
