Is stipend received by an article is taxable?
If no, then please mention the section no. or notification number, if any.
30 Replies
Vaibhav Jandey
(Life iz Hard; I'm Harder)
(1175 Points)
Replied 11 March 2012
Dear friend, Income tax act applies to all incomes except some specifically exempted by the provisions of the same....Income of an Article is not barred from that...therefore taxable
Supriyo Banerjee
(Executive Finance)
(181 Points)
Replied 11 March 2012
your stipend is taxable...but still there is always total income concept...and exemption limit...which will make you made tax free...and yes there is no provisions regarding stipend received by an article in IT Act...so it is taxable.
Supriyo Banerjee
(Executive Finance)
(181 Points)
Replied 11 March 2012
and taxable under head salaries since there is employee employer relationship.
CA SACHIN VIJ
(Chartered Accountant)
(112 Points)
Replied 12 March 2012
Stipend is taxable under the head salaries. there is no express provision to exclude stipend from total income. Thus taxable.
Jitendra Vyas
(Commercial Officer)
(178 Points)
Replied 12 March 2012
As per IT act it is not an exempted income.
suresh sharma
(article)
(25 Points)
Replied 12 March 2012
stipend is one type of scolership hence exempt u/s 10 of IT act 1961
suresh sharma
(article)
(25 Points)
Replied 12 March 2012
stipend is type of scolership to assist ur education exp hence it is exempt u/s 10 (16) of income tax act
sachin
(ARTICLES)
(434 Points)
Replied 12 March 2012
Stipend received by students from a CA as part of articleship training is NOT TAXABLE. It is exempt under section 10(16). Refer the case law of Sudhir Kumar Sharma Vs ITO (1983). As per this caselaw, it is exempt u/s 10(16).
CA HIRAL PATEL
(CHARTERED ACCOUNTANT)
(536 Points)
Replied 12 March 2012
Stipend dete hi kitna he jo taxable ho.............................
leeladhar
(apprentice)
(261 Points)
Replied 12 March 2012
Stipend is not taxable. Please find the attached supporting document.
Attached File : 684193 946367 articleship stipend .pdf downloaded: 271 times
satish kumar voleti
(A.C.A., (ICWAI))
(1686 Points)
Replied 12 March 2012
THE STIPEND RECEIVED BY THE ARTICLE STUDENT IS EXEMPTED U/S 10(16)
Section 10 of the I T Act provides income which are exempt from income tax. Sub section 16 of section 10 is regarding scholarship received by a person. It states :
’16) scholarships granted to meet the cost of education;”
Accordingly , if you got fellowship for higher education , the amount received as Stipend is not taxable. In my view, if you saved out of such exempt income and put in your saving account , those amounts are not taxable.There are many case laws which has very lucidly explained the provision u/s 10(16) of the I T Act. Some of these are
If scholarship is paid only for meeting the cost of education, the fact that the recipient does not spend the whole amount towards education or that he is able to save something out of it would not detract from the character of the payment being one for scholarship. CIT v. V.K. Balachandran [1984] 147 ITR 4 (Mad.).
The proper view to take on section 10(16) of the Act would be that scholarship, even though income in the hands of the scholar-recipient, would not be included in the taxable total income, if it was a scholarship granted to meet the cost of education – Dr. V. Mahadev v. CIT [1990] 51 Taxman 411/184 ITR 533 (Mad.).
Assessee received a scholarship from a US hospital to aid his study and research and not for the services rendered, Karnataka High Court held that the scholarship would be exempt under section 10(16), even though it was partly taxable under the American law - Addl. CIT [1981] 128 ITR 527 (Kar.).
Where the company of which the assessee was an employee granted scholarships to the children of its employees solely at its discretion without any reference to the terms of employment of the employees, and the assessee’s children had also received certain sum as scholarships from the company, even if the amounts were taken as having been paid to the assessee, they were amounts of scholarship and hence not liable to be included in the computation of the total income of the assessee within the meaning of section 10(16) – CIT v. M.N. Nadkarni [1986] 161 ITR 544 (Bom.).
There are Tribunals order on the same subject given as under
Income-Tax Officer.vs Dr. V. Ramalinghaswami. (6 ITD 491) [Delhi] which held that scholership is not taxable as per section 10(16) of the I T Act.
Dr JCN Joshipura Vs ACIT [56 ITD 424]1995 , held as follows
Dealing with the basic postulates of a scholarships in clause (16), the Hon’ble High Court in V. K. Balachandran’s case has held that it is an ‘ income receipt ‘. Nevertheless, it is excluded from the total income by being brought under section 10. The view of the income-tax statute of a scholarship, therefore, differs from the popular, or dictionary, view of a ‘ scholarship ‘, whereas under the popular view, scholarship is education made available gratis, the sense in which the same expression is used in the Income-tax Act, is positive payment made to a scholar for pursuit of his education. The scholarship is made free, it would not naturally come within the ambit of section 10(16). In the sense of payment made for studies, scholarship necessarily means some payment to meet the cost of education, the payment being made to the person pursuing the education and incurring the cost thereof.
There are, therefore, two considerations, which, altogether, make up the concept of a scholarship for meeting the cost of education within the meaning of section 10(16). One is that the scholarship is a payment intended to be an income receipt in the hands of the scholar. The other one is that whatever is paid is intended to make the cost of education of the recipient. Since the purpose is to meet the cost of education. The question whether the quantum of the payment is adequate or inadequate or is or is not, in excess of requirements are of beside the point. The scholarship may only meet the partial cost of education. Still it would be a scholarship within the meaning of section 10(16).”
Therefore, in my opinion , your stipend is not taxable as per section 10(16) of I.T Act.
There is another twist to your case. In case you were non resident during Fy 2006-07 and the stipend was paid by the Singpore Govt/university , receipt of stipend outside India is not taxable in India.
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 12 March 2012
Whether the stipend paid to trainee is taxable if taxable under which section or head of income...
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 exempt 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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