Perhaps everyone knows that the income of educational institutes are tax free. But what few people know is that the tax exemption to educational school or institutions are only when the profit isused for educational purpose .Then , the government brought in lots of conditions to check the tax free status of the schools and educational institutes.Up to the assessment year 1998-99, section 10(22), was providing exemption from taxability of income of an educational institution. Section 10(22) was providing no condition at all for granting exemption to an educational institution. In other words, there was no condition of spending of amount. There was no monitoring by any Government authority. Not even return of income was required to be filed.