The Trust’s application for Section 12AB registration and Section 80G approval was rejected due to scholarships given for studies abroad.
Saloni Kumari | Apr 23, 2026 |
Is giving a scholarship to an Indian student for studying abroad “foreign spending” of income or still a valid charitable use in India?
Fact of the Case
On May 29, 2025, Yogayatan Jankalyan Trust applied for registration under Section 12AB and Section 80G approval. The Income Tax Commissioner in Mumbai rejected the application, citing a violation of Section 11(1)(c) due to the trust’s scholarship to an Indian student abroad. As a result, the Section 80G approval was also denied due to the lack of valid 12AB registration.
Issue of the Case
Whether a scholarship for overseas study is treated as an application of income outside India or for charitable purposes in India?
Decision of the Tribunal
The Tribunal ruled in favor of the Trust, holding that scholarships granted in India to Indian students for studies abroad do not amount to application of income outside India. It directed the CIT(E) to grant registration under Section 12AB and consequential approval under Section 80G.
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