Hi.

Stipend is taxable in the hands of the recepient.

But the income is way too less to qualify for the slab.

But, if he has more than one source of income (House prop, other source, business, cap gn) and if the income exceeds the slab then its is chargeable to tax as per the FInance Act in force.

But the catch is, Insti doesnt allow any other profession/business to be carried out.

Hence, Stipend is taxable but it is just a theoretical concept. 

Hi All,

Its very rightly said by Aashish and Guarang.

The stipend as per the institute's prescripttion  per se is very less to cross the basic exemption limit. But student undergoing articleship  from a big 4 firm ( especially in the final year) earns stipend which does exceed the basic exemption limit. There is no notification as such in this regard.

However,  being associated with one of the Big 4 firms I could tell it from the experience of one of my fellow colleagues.

No stipend is not taxable..

With respect to Vignesh query, there is no notificaion.  But, with respect to the below linked ITAT Jaipur case law, holds good, till any further case law against the below linked judgement. /forum/files/54_articleship_stipend_10_16_exemption_case_law.pdf

As there is no notification grants CA Articleship stipend u/s.10(16) and the same way there is no notification denies the same.  As per my knowledge, When there is ITAT Judgement favouring the stipend as not taxable income, any latest ITAT Judgement or High Court Judgement can over rule the Jaipur case law.

So, if anybody has the case law on CA Articleship stipend other than Jaipur ITAT case law, kindly post here or forward to my email ID:sakarthick @ yahoo.com.  If there is no case law on the subject matter other than jaipur case law, then, CA Articleship stipend is exempted under section 10(16).

hhggg

It is taxable.

i Asked from Dr. Girish Ahuja. he said its taxable.

Hi Shashi Bhushan,

Just saying taxable or not taxable is not sufficient.  It needs justification based from Income Tax Act, Rules, Notification, Circular and Case law.  In my earlier reply I have given the Case law favouring stipend exempt from tax.  If you any other case law or notification in this regard, kindly send it.

i do mentioned. If you know girish ahuja then no further explanation required

Originally posted by : Kaya
	i think,  relationship of article trainee and C A member is not " employer ,employee " . its" trainee & principal" relationship... if you have any notification saying its  " employer ,employee " relation , then please share the same. i think its "trainee & principal" relation because in P F act , bonus act , article trainee's are excluded from calculation of employees...

kaya....in our articleship deed form no. '102'...it is mentioned that the principal is the employer and the trainee is the employee....you can see the same in almost all forms(student section)

So i dont think we need any kind of notification to know our status

Originally posted by : Shashi Bhushan
	Originally posted by :Ashok kumar " Hi Shashi Bhushan, Just saying taxable or not taxable is not sufficient.  It needs justification based from Income Tax Act, Rules, Notification, Circular and Case law.  In my earlier reply I have given the Case law favouring stipend exempt from tax.  If you any other case law or notification in this regard, kindly send it. "   i do mentioned. If you know girish ahuja then no further explanation required

Agreed with shashi....

Hi Shashi Bhushan / Harish Suwalka,

I know Dr.Girish Ahuja, the famous author for Income Tax.  I have not raised the question that someone opinion is correct or not.  This is discussion forum and I want the basis on which the opinion framed.

Apart from that, the basis of articleship is provide training to article assistant (trainee) by Principal member and  the stipend is paid for study and living expenses.  Even, the minimum stipend prescribed by the CA Institute is less than the minimum wages spectified under Minimum Wages Act.

the stipend is paid for study and living expenses.

it is just an assumption....you cant prove the point....Stipend can not be meant as scholership...bCoz Scholer ship is specific...i think you have got the point...

1. the employer-employee relationship

2. stipend Equals to Scholership

3. all the Big firms are deducting TDS from the Stipend (whr it exceed the limits).....

Originally posted by : Harish Suwalka
	the stipend is paid for study and living expenses. it is just an assumption....you cant prove the point....Stipend can not be meant as scholership...bCoz Scholer ship is specific...i think you have got the point... 1. the employer-employee relationship 2. stipend Equals to Scholership 3. all the Big firms are deducting TDS from the Stipend (whr it exceed the limits).....

Kindly go through the caselaw given in my earlier post, for your three points.  By deduction of TDS will not make disqualify for exemption.  Even for Income like Bank Interest on charitiable Trust registered u/s.10(23) will be subject to TDS, if they does not obtain nil deduction certificate from the IT Department.  But, the same will be exempted.

Stipend can be construed as Scholarship.  Stipend per se will not disqualify for scholarship.  Please go through the below notification issued under Section 10 (16), which states, some of the stipend were exempted and have employer and employee relationship:

Stipend paid by NCCHSI - Stipend of research fellowships working under the National Commission for the Compilation of History of Sciences in India under the auspices of the National Institute of Sciences of India should be treated as exempt from tax in the hands of the recipients under section 10(16)—Letter : F. No. 24/25/68-IT(A-I), dated 18-9-1966.

Allowance to retired scientists - Annual allowance payable to retired scientists under the scheme for ‘Utilisation of the services of retired scientists in the field of agriculture, animal husbandry and allied sciences’ is not a payment to meet the cost of education and will be taxable in the hands of the recipients—Letter : [F. No. 24/35/66-IT(A-I)], dated 4-10-1966.

Allowance of Rs. 6,000 per annum to the retiring research scientists granted by the Council of Scientific & Industrial Research, New Delhi should be treated as exempt from tax in the hands of the recipients under section 10(16)—Letter : F. No. 24/2/69-IT(A-I), dated 14-1-1968.

Living allowance/stipend under Colombo Plan and Special Commonwealth African Assistance Plan - Living allowance/stipend [Rs. 200 - Rs. 600 p.m.] paid to foreign trainees coming to India under the technical co-operation scheme of the Colombo Plan and the Special Common-wealth African Assistance Plan would be exempt from tax under section 10(16)—Source: Income-tax Circulars, published by the Directorate of Inspection (Research, Statistics and Publication), 1968 edition, p. 89.

stipend is a remuneration against a PRINCIPLE - STUDENT relation and not a EMPLOYER - EMPLOYEE relation.. also its too low to fall under any tax slabs