20 April 2009
Stipend is not included in salary definition, but it falls within the purview of the salary, as the employer employee relationship exist and that is the major criteria for charging the Tax, therfore if the stipend is exceeding the above limit it will attract the TDS.
21 April 2009
Stipend may be taxable or may not be taxable based on the fact of the case. First visit the scope of total income which is defined in section 5 of the Act. It says "5. (1) Subject to the provisions of this Act, the total income of any previous year of a person who is a resident includes all income from whatever source derived which (a) is received or is deemed to be received in India in such year by or on behalf of such person ; or (b) accrues or arises or is deemed to accrue or arise to him in India during such year ; or (c) accrues or arises to him outside India during such year " Thus all receipts are taxable unless exempt expressly under the I T Act. Stipend is not expressly exmept under the Act. Thus Stipend is certainly taxable income if it is purely being given in form of cost of living or as wages or salary or for any purpose but studies . However, if the Stipend granted is for furthering education or gaining knowledge , same can be claimed exempt u/s 10[16] of the I T act . In this regard the decision of the Karnataka High Court in A. Ratnakar v. Addl. CIT [1981] 128 ITR 527 can be applied.This was also followed by Tribunal in case of Income-tax Officer v. Dr. G.N. Ramachandran [1 ITD 902]
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