TDS on Stipend
This query is : Resolved
18 May 2010
Dear Respected Prof.
Pl. provide your opinion on following situation:
A resident Indian went abroad for study of MBA course from a foreign university. After 6 months he came back in India for 3 months internship with an Indian company. The Indian company is paying stipend to him @ 15K per month. What would be the treatment of the same as per Income Tax Act. Pl. also mention is there any professional tax payable on the same.
Thanx & Regards,
Ajay Gupta
New Delhi
Pl. provide your opinion on following situation:
A resident Indian went abroad for study of MBA course from a foreign university. After 6 months he came back in India for 3 months internship with an Indian company. The Indian company is paying stipend to him @ 15K per month. What would be the treatment of the same as per Income Tax Act. Pl. also mention is there any professional tax payable on the same.
Thanx & Regards,
Ajay Gupta
New Delhi
18 May 2010
Stipend would be treated as salary. Since the stipend is paid for 3 month. total stipend will be Rs.45000/- per annum which is below the taxable income limit. Hence tds is not applicable. Profession tax of Rs.200 per month will be deducted.
18 May 2010
aagreeee...
Provided he dont have any other taxable income which exceeds the minimum limit...
Provided he dont have any other taxable income which exceeds the minimum limit...
18 May 2010
treat stipand as salary
18 May 2010
stipand is exempt from tax.
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18 May 2010
If the stipend is paid only to meet the cost of education exemption under section 10(16) can be claimed.
Citation :- CIT Vs V.K.Balachandran (1984) 147 ITR 4 (Mad).
Citation :- CIT Vs V.K.Balachandran (1984) 147 ITR 4 (Mad).
19 May 2010
Stipend is treated as salary but Intership not a professional. intership so tds and income tax not applicable
19 May 2010
The section 10(16) is specifically for scholerships, internship is not a scholership but a kind of payment in the nature of salary, taxable under section 17.
19 May 2010
I would like to differ here with the above experts.
1) How can we treat stipend as salary? If it is a part of the MBA course just like we do CA articleship, the Employer-employee relation will not be there. And in that case it would not be treated as salary.
2) Rather it will be taxable as income from other sources.
3) Exemption u/s 10(16) is specifically for scholorships. In the case CIT Vs V.K.Balachandran (1984) 147 ITR 4 (Mad). as referred above, the 2 questions of law were whether the stipend was income & whether it is exempt under sec 10(16) to which the learned judges replied first in affirmative & later in negative.
With due respect I would like the experts to thinkover & if I m wrong kindly enlighten me.
1) How can we treat stipend as salary? If it is a part of the MBA course just like we do CA articleship, the Employer-employee relation will not be there. And in that case it would not be treated as salary.
2) Rather it will be taxable as income from other sources.
3) Exemption u/s 10(16) is specifically for scholorships. In the case CIT Vs V.K.Balachandran (1984) 147 ITR 4 (Mad). as referred above, the 2 questions of law were whether the stipend was income & whether it is exempt under sec 10(16) to which the learned judges replied first in affirmative & later in negative.
With due respect I would like the experts to thinkover & if I m wrong kindly enlighten me.
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19 May 2010
Thanks pujah for giving the right interpretation. I agree.
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23 May 2010
Plz , whether stipend is exempted u/s 10(16)??? i think stipend can be treated as a scholarship u/s 10 (16)
23 May 2010
@ Padmakumar:
Pls read explanaation of Pujah... She is correct.
Its stipend is taxable and is not exempt...
Pls read explanaation of Pujah... She is correct.
Its stipend is taxable and is not exempt...
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