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IADo you know schools are non-profit organisations?
That means the primary purpose is not to generate profits but to work for the welfare of society and these NPOs receive tax-exempt status from the government, meaning they don’t have to pay income tax.
But some school owners are playing with these regulations and generating profit from the school
But how?
So basically they create a private company or tie up with a company that provides services related to running the schools like dresses, books, computers etc. these companies basically called themselves the school management company.
These schools transfer their money to these companies for the services and In their accounts, they show them as expenses to avoid taxes and get profited indirectly.
There’s the lease model: construct a school building, lease it out to a non-profit trust, and collect the rentals. Take Career Point. While it manages schools, its fully-owned subsidiary, Career Point Infra, provides construction services for building schools. Since it builds and manages, Career Point is effectively running schools.
Do you think the government need stringent rules to fill these loopholes, share your views in the comments
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