Income of professional associations [Section 10(23A)] :

(i) Associations or institutions of the following classes approved by the Government and applying their income or accumulating it solely to their objects shall be exempt from tax on certain items of their income. The association or institution must:

(a) be established in India;

(b) have as its object the control, supervision, regulation or encouragement of the profession of law, medicine, accountancy, engineering or architecture, or any other profession specified by the Central Government.

(ii) All income arising to such an association, except the following categories of income, are exempt from inclusion in income:

(a) income under the head ‘interest on securities‘;

(b) income under the head ‘income from house property‘;

(c) income received for rendering any specific service; and

(d) income by way of interest or dividends derived from its investments.

(iii) However, approval once granted may be withdrawn if, at any time, the Government is satisfied that –

(1) the association or institution has not applied or accumulated its income in accordance with the provisions of the section;

(2) the activities of the association or institution are not being carried out in accordance with the conditions imposed on the basis of which the approval was granted.

(iv) Such withdrawal shall be made after giving reasonable opportunity to the assessee. A copy of the order shall be sent to the Assessing Officer as well as the assessee.