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Tax ability of stipend

Armman (student) (194 Points)

31 July 2011

Is stipend received from CA as article article assistant is taxable ?

if yes then under which head it should be included ?

if no then under which Section it is exempt ?

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20 Replies

SSG (1936 Points)
Replied 31 July 2011

Stipend received as article trainee is taxable under head "Salary".

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Devendra (Chartered Accountant) (4775 Points)
Replied 31 July 2011

If the Stipend is for furthering education or gaining knowledge, then the same can be claimed exempt u/s 10(16) of the Income Tax Act, 1961.

Citation : CIT vs Dr. G.N Ramchandran

Regards,

Devendra

ritesh garg (article) (95 Points)
Replied 31 July 2011

Yes, the stipend is taxable under IOS but the expenditure incurred to earn the stipend is allowed as deduction, so in case of CA students the taxable amount is mostly NIL.:(

It is not taxable under head salary because there is no employer employee relationship, the relation is of principal and student....

& Stipend received by CA Student is not exempt u/s 10(16) as it is not received as scholarship but received to meet the cost of travelling and other expenses related to articleship...

Dear Armaan, your query is resolved now..

1 Like

Armman (student) (194 Points)
Replied 01 August 2011

thanks for ur reply

@ SSG

how it is taxable under the head salary ?

as there is no employer employee relationship .....

CA. Arpita Singhal (Partner) (100 Points)
Replied 01 August 2011

Articleship Stipend is exempt from tax...

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Armman (student) (194 Points)
Replied 01 August 2011

@ CA. Arpita Singhal

under which section it is exempted

(Guest)

refer dr rahul tugnait case 2009, itat chandigarh. all stipends are exempt

Mukesh Kumar Singh (CA-FINAL) (4094 Points)
Replied 01 August 2011

Stipend received as article trainee is taxable under head "Salary".

Vikas Bansal (C.A. Final Student) (112 Points)
Replied 01 August 2011

Refer the case law:

Dr. Rahul Tugnait. Versus Income-Tax Officer. - Tribunal

Scholarship ....
..... granted by Scientific Research and Cultural Affairs Ministry-Out of the fellowships awarded under technical teachers training programme by the Ministry of Scientific Research and Cultural Affairs an amount of Rs. 250 per month (representing the cost of education) may be treated as exempt from income-tax-Circular No. 11(XXIII-24) [F. No. 27/67/60-IT(A-1)], dt. 4th April, 1961. Viewed from aforesaid different angles and facts of the present appeal, it can be said that the scholarship/stipend, received by a student from college/Government for pursuing higher studies, cannot be termed as salary, therefore, this appeal of the assessee is allowed.

RITIKA KUMAR (CA Article) (55 Points)
Replied 01 August 2011

it is not taxable under the head salary and another one thing is under ICAI Rules upto 1500/- in pm so only 18000 as a income of stipend so its not taxable in the Income Tax slab rates.

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sanjeev (student CA CS) (295 Points)
Replied 01 August 2011

i fully agree with Bansal

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 01 August 2011

Originally posted by : Vikas Bansal
	Refer the case law: Dr. Rahul Tugnait. Versus Income-Tax Officer. - Tribunal Scholarship .... ..... granted by Scientific Research and Cultural Affairs Ministry-Out of the fellowships awarded under technical teachers training programme by the Ministry of Scientific Research and Cultural Affairs an amount of250 per month (representing the cost of education) may be treated as exempt from income-tax-Circular No. 11(XXIII-24) [F. No. 27/67/60-IT(A-1)], dt. 4th April, 1961. Viewed from aforesaid different angles and facts of the present appeal, it can be said that the scholarship/stipend, received by a student from college/Government for pursuing higher studies, cannot be termed as salary, therefore, this appeal of the assessee is allowed.

not available to CA students unless its paid by university/any govt body,

so the amount paid by CA firm is taxable.

CA Mayur Sojrani (CA) (318 Points)
Replied 01 August 2011

Yes, the stipend is taxable under IOS but the expenditure incurred to earn the stipend is allowed as deduction, so in case of CA students the taxable amount is mostly NIL.:(

It is not taxable under head salary because there is no employer employee relationship, the relation is of principal and student....

& Stipend received by CA Student is not exempt u/s 10(16) as it is not received as scholarship but received to meet the cost of travelling and other expenses related to articleship...

Fully agree from ritesh