dnb fellowship student

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 December 2010 i am a medical postgraduate and presently persuing fellowship of dnb(diplomate of national board).i m getting a stipend of30000 per month . i do not have any yearly fees .only registration fee and exam fee. i would like to know whether my income is taxable. and what constitutes a student as per income tax rules . Is it mandatory to file income tax return.
waiting for your reply.
thanks;

CA.RAJIV SHUKLA FCA

CA.RAJIV SHUKLA FCA (Expert)
Follow

29 December 2010 In the Income Tax Act
If there is relationship of Employee and Employer exist then a person liable for Income Tax Compliances.

Meaning of Salary in Income tax Act covere fee as part of salary that you have to check yourself.

See Definition of salary

WHAT CONSTITUTES SALARY INCOME?

"Salary" is the remuneration received by or accruing periodically to an individual for service rendered as a result of expressed or implied contract.

Compensation or remuneration even in the following circumstances is chargeable to Income-tax under the head 'Salaries': -

a) When due from the former employer or present employer in the previous year, whether paid or not.

b) When paid or allowed in the previous year, by or on behalf of a former employer or present employer, though not due or before it becomes due.

c) When arrears of salary are paid in the previous year by or on behalf of a former employer or present employer, if not charged to tax in the period to which it relates.

It is, therefore, clear that apart from current years salary, even advance salary and/or arrears of salary may be taxed in the year of receipt. More specifically and elaborately, the Income-tax Act has stipulated that salary includes :-

a) Salary, including advance/arrears of salary;

b) Wages;

c) Fees;

d) Commission;

e) Pension;

f) Annuity;

g) Perquisite;

Receipts from Provident Fund chargeable to tax; Profit in lieu of or in addition to salary or wages; Gratuity;

Contribution of employer to Recognised Provident Fund in excess of prescribed limit; Interest on credit balance of Recognised Provident Fund in excess of notified rates;

i) Encashment of leave.

definition of 'salary' is inclusive and not exclusive.

Stipend paid to trainees OTHER THAN THOSE undergoing training under Aprrentice Act, 1961 attract EPF and ESI contribution. However there is a judgement withholding EPF Organisation from covering Trainees even other than Apprentices under EPF.

First of all there is a difference between STIPEND and SALARY.

Provident Fund is not deductable from STIPEND. The Provident Fund Scheme does not provide for deduction / contribution on & from STIPEND.

ESI Act provides for contribution / deductions from & on STIPEND.

Please also note that Consolidated Salary attracts the provisions of both PF & ESI - hence you are liable to to deduct and pay contribution to both PF & ESI.