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Is stipend income exempt?

Priyanka (Accounts Manager) (60 Points)

28 May 2014

Is Stipend Income of CA Article-ship Exempt? Although nothing has been mentioned about students pursuing CA in section 10(16).

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15 Replies

Gourav Kapoor (CA Final Student) (2977 Points)
Replied 28 May 2014

nice ques... TDS me b stipened k bare me kuch nahi kaha..

Stipend is generally not taxable, as it comes within the purview of Section 10(16), under which, scholarships granted to meet the cost of education is exempt. There is a case of Sudhir Kumar Sharma vs ITO (1983 15 Taxman 100 Jaipur Mag), where it was held that the stipend received by an articled clerk from a chartered accountant is exempt under Section 10(16). The reason given by the Bench was that the stipend was paid to meet the cost of books, coaching fees, examination fees, and so on. But there are different views as well: It is also considered that the stipend paid by CA firm is not for meeting the expenses of education but for maintaining the cost of living, etc. Then this will not come under 10(16). This is generally the case where the article assistant receives a higher amount of Stipend in case such as Industrial training or when he/she passes his/her final examination before completing the training. Because he is still receiving the stipend and Education is almost complete, then it can be said that the expenses are not for meeting the cost of education. If this is the case then such amount will be taxable under “IFOS”. Therefore it depends upon case to case, but it is generally exempt.

Read more at: /forum/taxability-of-stipend-received-126239.asp#.U4WN4IGSwjE

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(Guest)

it is not exempted................ it is taxable

1 Like

(Guest)

In every case,stipends cant be treated as schoolship for meeting education expenses... so it will be taxable in my view

Nikhil Kaushik (Fellow CA) (86507 Points)
Replied 28 May 2014

it doesnt get covered under IFOS in any case. 10(16) only covers scholarships, something stipend can never be classified as since it has no link to the cost of education. the case normally people refer to is an old Rajasthan case, which though hold good but has not been tested in recent days. normally organization deduct TDS under 192 or 194J. In my personal case, TDS was deducted under 192.

Ankit Sharma (Student CA Final ) (21 Points)
Replied 28 May 2014

1 Scholarships to meet cost of education - Specific cases where they have been treated as exempt from tax under clause (16)

2 ANNUAL ALLOWANCE GRANTED TO RETIRING RESEARCH SCIENTISTS

3 STIPEND OF RESEARCH FELLOWSHIPS WORKING UNDER THE NATIONAL COMMISSION FOR THE COMPILATION OF HISTORY OF SCIENCES OF INDIA

4 FULBRIGHT GRANTS TO AMERICAN STUDENTS

5 JUNIOR/SENIOR RESEARCH FELLOWSHIPS AWARDED BY THE department OF ATOMIC ENERGY

6 FINANCIAL ASSISTANCE TO RESEARCH WORKERS IN UNIVERSITIES FOR UNDERTAKING RESEARCH OR LEARNED WORK

7 MAINTENANCE ALLOWANCE GRANTED TO FOREIGN TRAINEES - IAESTE SCHEME - REFERENCE FROM THE MINISTRY OF EDUCATION

8 RESEARCH FELLOWSHIPS IN ENGINEERING, TECHNOLOGY, HUMANITIES AND SCIENCE SUBJECTS

9 JUNIOR AND SENIOR RESEARCH FELLOWSHIPS AWARDED BY THE COUNCIL OF SCIENTIFIC AND INDUSTRIAL RESEARCH

10 NATIONAL RESEARCH FELLOWSHIP AND FELLOWSHIPS TO GERMAN NATIONALS AWARDED BY THE MINISTRY OF EDUCATION

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Avinash Tripathi (CONSULTANT) (118 Points)
Replied 28 May 2014

Nothing has been specified anywhere regarding taxability of stipend. As cost of such specification ll b mch mor thn the revenue collected of any by taxing stipend..