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stipend

CA. Shweta Satam (Student) (32 Points)

05 May 2010

Is stipend received by articles or by doctors taxable/exempt?

Is the same exempt u/s. 10(16)??

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20 Replies

(Guest)

it is exempt under sec. 10{16}...as decided in case of mukesh kumar vs ITO

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Tanvi (Student) (224 Points)
Replied 06 May 2010

hey pls clarify it....coz accrdng to me if basic exemption limit is crossed...it is taxable????

(Guest)

Originally posted by : Rohit Kapoor
	it is exempt under sec. 10{16}...as decided in case of mukesh kumar vs ITO

I agree. It is exempted.

Hardik (Practicing Charted Accountant) (324 Points)
Replied 06 May 2010

can u give more details abt the case

Kushal Bansal (CA Final, CS Final) (286 Points)
Replied 06 May 2010

chk out this decision..

Attached File : 12 stipend taxable or not.pdf downloaded: 658 times

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Hardik (Practicing Charted Accountant) (324 Points)
Replied 06 May 2010

Thanx Kushal.......

Kranthi Kumar (Industrial Trainee E & Y) (46 Points)
Replied 06 May 2010

The above judgement got overruled later... ritenw stipend is very much taxable and am paying it..

CA CS CIMA Prakash Somani (Landmark Group) (23507 Points)
Replied 06 May 2010

Hi Kranthi,

can you pls provide any notification in this regard ?

CA CS CIMA Prakash Somani (Landmark Group) (23507 Points)
Replied 06 May 2010

though i am also in your favour as far as i heard about taxability of stipend....

Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 06 May 2010

A long drawn battle and has also been discussed in length here

/forum/re-stipend-taxable-or-exempt-58391.asp

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CA Shiv (Business Controller) (2987 Points)
Replied 06 May 2010

yes it is treated as income and now its taxable... But for CA stipend there is exemption still. SOme show it in ITR and some dont.....

mostly the articles from BIG4 are paying tax also as their stipend is higher and crosses exemption limit.It is treated as deemed salary.

For ca articles it is referred IN section 10(16), wherein scholarship for meeting cost of education is excludible from taxable income.

Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 06 May 2010

What exemption is there for CA Students?

Stipend does not mean scholarship for meeting cost of education to be excludible from taxable income.

It is taxable. If it was not then why the big 4's are deducting TDS on the same as per section 192.

CA Shiv (Business Controller) (2987 Points)
Replied 06 May 2010

I agree aditya... But its still a big question and no answer as of now... there is nothing in Act for it....

But for CA there was a case laws much time back and many tax exmeption on basis of that. BIG4 are deduction TDS to be on safer side....

As of now no perfect provision in IT act.....

Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 06 May 2010

The case law is of Sudhir Kumar Sharma (1983) 15 Taxmann 100 of ITAT Jaipur Bench.

Orders of the ITAT have no validity in the income tax laws and on the deaprtment. Further in the same case law there is mention that the same is applicable before introduction of rule 32B prescribing the minimum stipend rules was prescribed by the Institute which do not follow the follow the practice of paying a meager amount to meet the cost of books, fees, etc and hance cannot be termed as receipt for the purpose of meeting the cost of education to be exempt u/s 10(16).