Section 10(23C) Educational & Medical Institutions Guide: Form 10A/10AB Approval, 85% Application & Form 10BB Audit Traps

Executive Overview & Quick Highlights

In Indian non-profit and charitable taxation, educational and medical institutions occupy a distinct statutory space under Section 10(23C) of the Income-tax Act, 1961. Historically, universities, primary and secondary schools, research academies, and charitable hospitals enjoyed wide tax exemptions under clauses (iiiab), (iiiac), (iiiad), (iiiae), (iv), (v), (vi), and (via) of Section 10(23C), running parallel to the general charitable trust framework under Sections 11, 12, and 12AB.

However, successive Finance Acts have restructured Section 10(23C) into a stringent, highly monitored compliance regime. Parliament recognized that operating dual parallel exemption tracks—where an entity could simultaneously or alternately claim exemption under Section 10(23C) and Section 11/12—created regulatory arbitrage and opaque financial reporting. Under the modern architecture operationalized by the Finance Act, 2020 and tightened by subsequent amendments, an institution is strictly prohibited from holding simultaneous registrations under Section 12AB and Section 10(23C). If an entity chooses the Section 10(23C) path, its Section 12AB registration becomes inoperative by operation of law, and vice versa.

Furthermore, the compliance requirements of Section 10(23C) have been harmonized with the trust regime. Entities having aggregate annual receipts exceeding ₹5 Crore under sub-clauses (vi) and (via) must obtain formal prior approval through the digital filing of Form 10A (for 3-year provisional registration) or Form 10AB (for 5-year regular registration or renewal) before the Principal Commissioner or Commissioner of Income Tax. They must strictly apply at least 85% of their total income solely to the objects of education or medical relief, adhere to rigid restrictions on corpus donations under the amended Explanation 2 to the third proviso, maintain prescribed digital books of accounts under Rule 17AA, and submit an electronic Tax Audit Report in Form 10BB or Form 10B one month prior to the ITR filing due date.

Leveraging dedicated institutional software like assureTax and assureFinancials from the assureOffice suite enables finance directors, university registrars, hospital trustees, and practicing chartered accountants to audit revenue thresholds, compute permissible accumulations under Form 10 and Form 9A, and safeguard their institutional tax exemptions from catastrophic cancellation and Section 115TD exit taxes.

Core Highlights of the Section 10(23C) Architecture

The ₹5 Crore Exemption Divide: Educational and medical institutions with aggregate annual receipts up to ₹5 Crore operate under automatic statutory exemption under Section 10(23C)(iiiad) and (iiiae), whereas institutions exceeding ₹5 Crore must secure formal approval under sub-clauses (vi) and (via).
Mandatory Single-Regime Election: An institution cannot maintain active registrations under both Section 12AB and Section 10(23C). Holding an active approval under one renders the other inoperative, eliminating regulatory dualism.
Synchronized Five-Year Approval Lifecycle: Like Section 12AB, approvals under Section 10(23C)(vi) and (via) are strictly time-bound: provisional approval in Form 10AC for 3 years, followed by regular approval in Form 10AD for 5 years via Form 10AB.
Strict 85% Application Mandate: At least 85% of annual receipts must be applied directly towards educational or medical purposes. Shortfalls must be formally accumulated through electronic filing of Form 10 (up to 5 years) or Form 9A (deemed application).
Harmonized Form 10B and Form 10BB Audit: Under Rule 16CC, institutions with receipts exceeding ₹5 Crore, or having received foreign donations, or having applied income abroad must file Form 10B; all other eligible institutions file Form 10BB.
Inter-Trust Corpus Donation Restriction: Donations made to other registered trusts or institutions towards their corpus cannot be treated as application of income under the third proviso to Section 10(23C).

Detailed Statutory Architecture & Legislative Logic

Section 10(23C) contains an intricate matrix of specific sub-clauses, each catering to a distinct category of public institutional activity. The statutory logic rests on public utility: education and healthcare are core sovereign duties, and non-profit institutions supplementing state infrastructure deserve tax immunity, provided their surplus is strictly re-invested into public welfare rather than diverted to private founders.

Statutory Taxonomy of Sub-Clauses under Section 10(23C)

Sub-Clause	Target Institutional Category	Approval Requirement	Audit & Exemption Prerequisites
(iiiab)	University / Educational institution substantially financed by the Government	Automatic exemption; no Form 10A/10AB approval required	Government grants must exceed prescribed percentage (typically > 50% of total receipts)
(iiiac)	Hospital / Medical institution substantially financed by the Government	Automatic exemption; no Form 10A/10AB approval required	Government funding must exceed 50% of operating receipts
(iiiad)	University / Educational institution existing solely for educational purposes	Automatic exemption if aggregate annual receipts do not exceed ₹5 Crore	Must exist solely for educational purposes and not for profit; no commercial diversion
(iiiae)	Hospital / Medical institution existing solely for philanthropic purposes	Automatic exemption if aggregate annual receipts do not exceed ₹5 Crore	Must exist solely for treatment of illnesses and not for profit; receipts ≤ ₹5 Crore
(vi)	University / Educational institution with aggregate annual receipts exceeding ₹5 Crore	Mandatory formal approval via Form 10A (Provisional) or Form 10AB (Regular)	Must obtain URN in Form 10AC/10AD, apply 85% of income, maintain books u/r 17AA, file Form 10BB/10B
(via)	Hospital / Medical institution with aggregate annual receipts exceeding ₹5 Crore	Mandatory formal approval via Form 10A (Provisional) or Form 10AB (Regular)	Quasi-judicial review of genuine activities, 85% application rule, Form 10BB/10B audit
(iv) & (v)	Charitable institutions of national importance (iv) and public religious trusts (v)	Mandatory formal approval via Form 10A/10AB on e-filing portal	Governed by the third proviso; subject to identical 85% application and accumulation rules

Deep-Dive Technical Mechanics & Multi-Act Interplay

1. The ₹5 Crore Threshold Aggregation Rule under Rule 2BC

One of the most consequential compliance traps involves determining whether an entity falls under the automatic exemption of sub-clauses (iiiad)/(iiiae) or requires formal Commissioner approval under sub-clauses (vi)/(via). Historically, the monetary threshold was ₹1 Crore per institution. The Finance Act, 2021 elevated the threshold to ₹5 Crore under Rule 2BC of the Income-tax Rules, 1962.

Crucially, Rule 2BC enforces an Aggregation Rule. Where a society, trust, or Section 8 company runs multiple schools, colleges, or clinics under the same PAN, the ₹5 Crore threshold is calculated by aggregating the gross receipts of all such institutions managed by the entity. For example, if a charitable society operates three primary schools with annual receipts of ₹2 Crore, ₹1.8 Crore, and ₹1.5 Crore respectively, the aggregate annual receipts equal ₹5.3 Crore. Consequently, the society cannot claim automatic exemption under sub-clause (iiiad) for any of its schools; it must obtain formal approval under Section 10(23C)(vi) via Form 10A/10AB.

2. The Single-Regime Bar and Conversion Mechanics

Prior to 2020, charitable institutions routinely held concurrent registrations under Section 12AA and approvals under Section 10(23C)(vi), switching between regimes during assessment proceedings to avoid disallowances. To terminate this practice, the first proviso to Section 11(7) and the twentieth proviso to Section 10(23C) instituted an absolute bar:

If an institution registered under Section 12AB obtains approval under Section 10(23C), its Section 12AB registration becomes permanently inoperative from the date of such approval.
Conversely, if an entity holding an active Section 10(23C) approval subsequently registers under Section 12AB, its Section 10(23C) approval ceases to be operative.
An institution whose registration becomes inoperative cannot revive it without formally applying for cancellation of the active regime and transitioning back through Form 10AB.

3. The 85% Application Rule and Accumulation Protocols

Under the third proviso to Section 10(23C), an approved institution must apply at least 85% of its total income solely to the objects for which it is established. In computing application:

Operational expenses incurred solely for educational/medical purposes are deductible.
Capital expenditures (such as constructing lecture halls, purchasing MRI scanners, or developing libraries) are treated as valid applications of income, provided they are not funded out of borrowed funds or corpus donations.
Depreciation on assets whose cost was claimed as an application of income in any assessment year cannot be claimed again, precluding double deductions under the third proviso.

Where the institution is unable to apply 85% of its income during the previous year, it can prevent taxation of the shortfall by deploying two statutory options:

Deemed Application under Explanation 1 (Form 9A): If income was not received during the year or was received late in the financial year, the entity can file Form 9A electronically on or before the due date under Section 139(1), deemed-applying the funds to the subsequent financial year.
Specific Accumulation under Explanation 3 (Form 10): The entity can accumulate up to 100% of unspent income for a period not exceeding five years by passing a resolution specifying the exact purpose, investing the funds in Section 11(5) approved modes, and electronically filing Form 10 at least two months prior to the ITR filing due date under Section 139(1).

4. Form 10BB vs Form 10B Reporting Framework

Under Rule 16CC, every institution holding approval under Section 10(23C) whose total income (without giving effect to Section 10) exceeds the basic exemption limit must obtain a report of audit from a Chartered Accountant in the prescribed electronic form:

Form 10B: Mandatory if the total income of the institution exceeds ₹5 Crore during the previous year, or if it received any foreign contribution, or if it applied any part of its income outside India. Form 10B requires deep-dive disclosure of interested persons under the twenty-first proviso, payroll splits, and overseas remittances.
Form 10BB: Applicable to all other institutions holding Section 10(23C) approvals that do not trigger the high-value or cross-border criteria of Form 10B.

Both forms must be uploaded on the e-filing portal with the Chartered Accountant's Digital Signature Certificate (DSC) at least one month prior to the due date for furnishing the return of income under Section 139(1). Late filing of the audit report results in complete denial of exemption, triggering assessment at the Maximum Marginal Rate (MMR).

Real-World Practical Challenges & Worked Numerical Case Studies

Case Study 1: Aggregation Trap for Multi-Branch School Societies

Context: Vidya Bharati Educational Society manages four secondary schools across Haryana. In FY 2026-27, its individual school accounts reveal:

School Campus Alpha: Gross Tuition & Bus Fees = ₹1,60,00,000
School Campus Beta: Gross Tuition & Lab Fees = ₹1,40,00,000
School Campus Gamma: Gross Tuition Fees = ₹1,20,00,000
School Campus Delta: Gross Tuition Fees = ₹1,10,00,000
Total Aggregate Receipts of Society: ₹1,60,00,000 + ₹1,40,00,000 + ₹1,20,00,000 + ₹1,10,00,000 = ₹5,30,00,000

The Operational Hazard:

The management assumed that because no individual school had receipts exceeding ₹5 Crore, each school was independently exempt under Section 10(23C)(iiiad), and therefore the society did not apply for formal approval under Section 10(23C)(vi) in Form 10A/10AB.

Statutory Consequence & Remedy:

Under Rule 2BC, the ₹5 Crore threshold applies to the legal person (the Society), not to individual school branches. Because aggregate receipts (₹5.30 Crore) exceed ₹5 Crore, the automatic exemption under sub-clause (iiiad) is legally unavailable. If assessed without approval, the society's net surplus is taxed at 34.944% as an Association of Persons (AOP). Using assureTax, the society detects the aggregation breach, applies for condonation of delay under Section 119(2)(b) before the CBDT, and files Form 10AB under sub-clause (vi), demonstrating continuous non-profit education to secure retrospective approval.

Case Study 2: Hospital Pharmacy Operations and Commercial Profit Scrutiny

Context: Sanjeevani Charitable Hospital operates a 150-bed multi-specialty healthcare facility approved under Section 10(23C)(via). In FY 2026-27, it generates ₹12,00,00,000 from inpatient/outpatient healthcare services. Simultaneously, its in-house retail pharmacy sells prescription medicines to outpatients and the general public, generating gross receipts of ₹4,00,00,000 with a net profit margin of 22% (₹88,00,000).

Audit Dispute on "Solely for Philanthropic Purposes":

The Assessing Officer issued a notice proposing to cancel approval under the second proviso to Section 10(23C), asserting that selling medicines to non-admitted outpatients constitutes a commercial business activity, violating the statutory mandate that the hospital must exist "solely for philanthropic purposes and not for purposes of profit."

Defense Principles & Accounting Segregation:

Under the Supreme Court ruling in New Noble Educational Society v. CCIT (2022) 448 ITR 577 (SC), the expression "solely" means exclusively; an institution cannot pursue commercial ventures unconnected with its core non-profit mandate. However, dispensing medicines to hospital patients is an integral, incidental part of medical relief. To protect its exemption, Sanjeevani proves through assureFinancials that 85% of pharmacy sales were dispensed directly to registered hospital inpatients and emergency consultations. For retail walk-in sales (15%), the hospital maintains separate books of account under the seventh proviso to Section 10(23C), paying normal corporate tax on that net commercial surplus while preserving its overarching Section 10(23C)(via) tax immunity.

Case Study 3: Capital Expenditure Application vs Depreciation Double Deduction

Context: Greenfield University approved under Section 10(23C)(vi) collects ₹25,00,00,000 in student fees in FY 2026-27. It expends ₹15,00,00,000 on faculty salaries and academic operations. Additionally, it constructs a new advanced robotics research building costing ₹7,00,00,000, funded entirely from current operating surpluses.

Computation of 85% Application:

Total Gross Receipts: ₹25,00,00,000
Mandatory 85% Application Threshold: ₹25,00,00,000 × 85% = ₹21,25,00,000
Revenue Operating Expenditure: ₹15,00,00,000
Capital Expenditure on Educational Assets: ₹7,00,00,000
Total Allowable Application: ₹15,00,00,000 + ₹7,00,00,000 = ₹22,00,00,000 (88% of gross receipts)
Statutory 15% Unconditional Accumulation: ₹3,75,00,000
Net Taxable Income: Nil

Subsequent Year Depreciation Disallowance:

In FY 2027-28, the accountant attempts to claim 10% depreciation (₹70,00,000) on the robotics building. Under the third proviso to Section 10(23C), depreciation cannot be claimed on any asset whose full acquisition cost was previously allowed as an application of income. The software automatically disallows the depreciation deduction, preventing a double deduction audit addition under Section 143(1)(a).

Case Study 4: Inter-Institution Corpus Donations and Application Shortfall

Context: Apex Medical Academy (Institution A, approved u/s 10(23C)(vi)) donates ₹1,00,00,000 from its current revenue surplus to National Kidney Research Foundation (Institution B, registered u/s 12AB) specifically earmarked as a "Corpus Donation" for establishing a dialysis ward.

Statutory Disallowance under Explanation 2 to Third Proviso:

Under Explanation 2 to the third proviso to Section 10(23C), any donation made to another trust or institution towards its corpus cannot be treated as application of income for educational or medical relief.

Consequently, Institution A cannot count the ₹1,00,00,000 towards its mandatory 85% application. This creates an inadvertent application shortfall of ₹1,00,00,000. To prevent this unapplied sum from being taxed at the Maximum Marginal Rate (34.944%), Institution A files Form 10 under Explanation 3 within the statutory two-month pre-ITR deadline, accumulating the sum for its own campus expansion project, neutralizing the tax exposure.

Case Study 5: Interested Person Transactions and Section 271AAE Penalty Defense

Context: St. Jude Medical Research Institute (approved u/s 10(23C)(via)) leases high-end diagnostic MRI imaging machinery from a partnership firm in which the President of the Institute holds a 40% profit share (a specified interested person under the twenty-first proviso). The Institute pays an annual lease rental of ₹1,20,00,000, whereas prevailing commercial lease rates from independent vendors average ₹70,00,000.

Statutory Penalties under Section 271AAE:

The excessive payment of ₹50,00,000 represents an illegal benefit conferred upon an interested person under the twenty-first proviso.
Under Section 271AAE, the Assessing Officer levies a mandatory penalty equal to 100% of the excessive benefit (₹50,00,000) for the first violation.
Furthermore, this constitutes a "specified violation" under the second proviso to Section 10(23C), empowering the Commissioner to issue a show-cause notice proposing cancellation of the Institute's approval.

The Institute terminates the lease contract, recovers the excess ₹50,00,000 from the President's personal account, and submits an independent Registered Valuer pricing study to the CIT(Exemptions), avoiding cancellation of its approval.

Case Study 6: Transitioning from Section 12AB to Section 10(23C) and Form 10AB Timing

Context: National Institute of Technology & Management held registration under Section 12AB expiring on March 31, 2026. The trustees decided that operating under Section 10(23C)(vi) is strategically more appropriate for securing international academic research grants.

Procedural Sequence & Risk Mitigation:

Under the twentieth proviso to Section 10(23C), obtaining approval under Section 10(23C)(vi) automatically renders the Section 12AB registration inoperative. The institute files Form 10AB under Section 10(23C)(vi) on October 15, 2025 (at least six months prior to expiry). The CIT(Exemptions) issues an approval order in Form 10AD on February 18, 2026, granting a 5-year regular approval from AY 2026-27 to AY 2030-31. The transition is completed seamlessly without a single day of un-exempt gap, completely averting Section 115TD exit tax.

Case Study 7: Delayed Filing of Form 10BB Audit Report and Exemption Forfeiture

Context: Radiant Public School Society had annual receipts of ₹8,00,00,000 in FY 2025-26. The statutory audit was completed on October 25, 2026, and Form 10BB was uploaded on October 28, 2026 (three days prior to the ITR filing due date of October 31, 2026).

Fatal Statutory Non-Compliance:

Under Rule 16CC read with the tenth proviso to Section 10(23C), the audit report in Form 10BB must be furnished at least one month prior to the due date for furnishing the return of income under Section 139(1) (i.e., on or before September 30, 2026). Uploading it on October 28 breaches the statutory deadline by 28 days.

The CPC processes the return under Section 143(1)(a), denies the entire Section 10(23C)(vi) exemption, and computes taxable income on gross receipts, issuing a demand notice of ₹2,79,55,200. The society immediately files an urgent Condonation Application under Section 119(2)(b) before the Principal Chief Commissioner of Income Tax, establishing genuine technical hardship. The delay is condoned, and the exemption is restored upon payment of a token administrative cost.

Step-by-Step Audit & Compliance Verification Checklist

Institutional audit teams and financial controllers should execute this systematic 10-step protocol to safeguard Section 10(23C) approvals:

Step	Verification Action Item	Primary Tool / System	Governing Milestone
1	Aggregate gross receipts across all institutions under the same PAN to verify the ₹5 Crore threshold	assureFinancials Ledger	Annual Accounts Finalization
2	Verify active Form 10AC/10AD approval URN and calendar exact date 6 months prior to expiry	Income Tax e-Filing Portal	180 Days Prior to Expiry
3	Confirm single-regime status: verify that Section 12AB registration is marked inoperative	e-Filing Trust Register	Prior to Form 10AB Filing
4	Audit mandatory digital books of account and registers maintained under Rule 17AA	Audit Working Papers	Pre-Audit Review
5	Calculate 85% application ratio; segregate capital expenditure and verify zero double-depreciation claims	assureTax Exempt Engine	Financial Year-End
6	Prepare and electronically file Form 9A for deemed application of delayed/accrued receipts	Form 9A (e-Filing)	Due date u/s 139(1)
7	Prepare and electronically file Form 10 for specific 5-year accumulations with Section 11(5) proof	Form 10 (e-Filing)	2 Months Prior to ITR Date
8	Conduct strict interested person audit under twenty-first proviso on all trustee/founder contracts	Audit Governance Schedule	Quarterly Review
9	Finalize and upload Tax Audit Report in Form 10B (if receipts > ₹5 Cr/foreign funds) or Form 10BB	Form 10B / Form 10BB	1 Month Prior to ITR Date
10	Furnish annual Return of Income in Form ITR-7 before the statutory due date under Section 139(4A)	ITR-7 e-Filing Utility	October 31 Statutory Due Date

Workflow Integration with the assureOffice Ecosystem

Managing multi-campus academic institutions, tracking hospital revenue streams, and maintaining compliance across evolving Section 10(23C) mandates demands integrated enterprise systems. The assureOffice suite equips institutions with comprehensive tooling:

assureTax: Houses dedicated tax computation engines for Section 10(23C)(vi) and (via). It calculates the 85% application ratio, validates capital expenditure offsets, prevents improper depreciation deductions, generates pre-submission XML schemas for Form 9A and Form 10, and runs automated diagnostics on Form 10BB/10B audit schedules.
assureFinancials: Provides automated multi-branch accounting templates adhering strictly to Rule 17AA. It aggregates PAN-wide receipts across multiple campuses, maintains segregated ledgers for incidental hospital pharmacy operations, and monitors Section 11(5) approved banking investments.
assureNotice: Monitors the e-filing portal around the clock for questionnaire notices, hearing dates, or proposed cancellation proceedings issued by the Commissioner of Income Tax (Exemptions), providing pre-drafted legal response submissions supported by binding judicial precedents.
assurePractice: Empowers chartered accountancy firms and educational trusts to manage Form 10AB renewal calendars, tracking 180-day and 90-day warning alerts to ensure approvals never lapse.

16 Detailed Practitioner FAQs

1. What is the fundamental difference between Section 10(23C) and Section 12AB?

Section 10(23C) provides specific tax exemptions tailored for educational and medical institutions (as well as notified public trusts), whereas Section 12AB is a general tax exemption framework applicable to all charitable and religious trusts across all categories of public philanthropy.

2. Can an institution hold simultaneous approvals under both Section 12AB and Section 10(23C)?

No. Under the twentieth proviso to Section 10(23C) and the first proviso to Section 11(7), simultaneous registrations are strictly prohibited. An institution must elect one regime; activating one automatically renders the other inoperative.

3. What is the monetary threshold for automatic exemption under Section 10(23C)(iiiad) and (iiiae)?

Under Rule 2BC of the Income-tax Rules, 1962, the threshold is ₹5 Crore of aggregate annual receipts across all educational or medical institutions run by the entity under the same PAN.

4. Does the ₹5 Crore threshold apply per school campus or per society PAN?

The ₹5 Crore threshold applies to the legal entity as a whole. Under Rule 2BC, receipts from all educational or medical institutions managed under the same PAN must be aggregated. If aggregate receipts exceed ₹5 Crore, formal approval under sub-clause (vi) or (via) is mandatory.

5. What is the validity period of provisional and regular approvals under Section 10(23C)?

Provisional approval granted in Form 10AC is valid for three assessment years. Regular approval granted in Form 10AD via Form 10AB is valid for five assessment years.

6. What is the mandatory annual application percentage required under Section 10(23C)?

Under the third proviso to Section 10(23C), an institution must apply at least 85% of its total receipts during the financial year solely to the educational or medical objects for which it is established.

7. Can capital expenditure on building construction be claimed as application of income?

Yes. Capital expenditures incurred solely for attaining educational or medical objects (such as constructing classrooms, hostels, or diagnostic laboratories) are treated as valid application of income, provided they are not funded from loans or corpus donations.

8. Can an institution claim depreciation on assets whose full acquisition cost was allowed as an application?

No. Under the third proviso to Section 10(23C), depreciation cannot be claimed on any capital asset whose full cost was claimed and allowed as an application of income in any previous year, preventing double deductions.

9. How can an institution protect its exemption if it fails to apply 85% of its income?

The institution can file Form 9A for deemed application (where income was received late or not realized) on or before the ITR due date, or file Form 10 to accumulate funds for up to five years for a specific capital project at least two months prior to the ITR filing due date.

10. Can an educational institution donate its surplus funds to another charitable trust towards its corpus?

No. Under Explanation 2 to the third proviso to Section 10(23C), any donation made to another trust or institution towards its corpus cannot be treated as an application of income for the donor institution.

11. When must Form 10B be filed instead of Form 10BB?

Form 10B is mandatory if the institution's total income exceeds ₹5 Crore during the previous year, or if it received any foreign contribution, or if it applied any part of its income outside India. All other eligible institutions file Form 10BB.

12. What is the statutory deadline for uploading Form 10BB or Form 10B?

Under Rule 16CC, the audit report must be uploaded electronically on the e-filing portal with the auditor's DSC at least one month prior to the due date for furnishing the return of income under Section 139(1) (i.e., on or before September 30 for corporate trusts).

13. What is the consequence of filing Form 10BB after the September 30 deadline?

Late filing of Form 10BB leads to the complete denial of tax exemption under Section 10(23C), resulting in the entire net surplus being taxed at the Maximum Marginal Rate (MMR) under Section 143(1)(a).

14. What are the penalties for providing undue benefits to interested persons under Section 10(23C)?

Under Section 271AAE, a penalty equal to 100% of the benefit is levied for the first violation, and 200% for subsequent violations. Furthermore, it constitutes a specified violation empowering the Commissioner to cancel the institution's approval.

15. Can an institution running a hospital pharmacy sell medicines to walk-in retail customers?

Selling medicines to non-patients is considered commercial activity. Under the seventh proviso to Section 10(23C), the institution must maintain separate books of account for such business undertakings and pay normal tax on that commercial profit.

16. What is the tax implication if an institution fails to renew its Section 10(23C) approval?

If an institution fails to apply for renewal in Form 10AB at least six months prior to expiry, its approval lapses, stripping it of tax exemption and triggering the Section 115TD Exit Tax on its net accreted income at 34.944%.