Scholarships Abroad Considered As Foreign Income Use Or Charitable Use In India: ITAT Answers:

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.