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Taxability of Stipend

RAvi m (Student) (49 Points)

19 April 2010

Wht is the taxability of stipend earned as income /??

Stipend earned by articles are taxable ??

if yes or not., under which provisions..?

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20 Replies

(Guest)

It is exempted u/s 10(16)

1 Like

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praveen (Chartered Accountant) (6971 Points)
Replied 19 April 2010

Agreed

CA AYUSH AGRAWAL (Kolkata-Pune-Mumbai) (26986 Points)
Replied 19 April 2010

Its Taxable..........

Exemption U/s 10(16) is Withdrawn in Financial Year Amended.....Yr(Not Sure)

Alex Sharma (CA & ICWA Final student; CS & CFA completed) (194 Points)
Replied 19 April 2010

No CA firm pays 13000+ p.a stipend p.m.

dont worry abt taxability

CA AYUSH AGRAWAL (Kolkata-Pune-Mumbai) (26986 Points)
Replied 19 April 2010

@ Alex..........Please Clarify UR Self

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CA. SANDEEP SHARMA (PARTNER) (117 Points)
Replied 19 April 2010

is stipend scholarship ?

because as per section 10 (16) scholar ship granted to meet the cost of education is exempt ..

kindly clarify it

RAvi m (Student) (49 Points)
Replied 19 April 2010

but can the stipend be considered as scholarship ???

(Guest)

To quote from Allahbad High Court which gave favourable decision to assessee in a combined order in cases of

Commissioner of Income-tax v. B.L. Garg [2007] 289 ITR 218 (All)
Commissioner of Income-tax v. Y.K. Seth [2007] 289 ITR 218 (All)

The meaning of the word Scholarship as per Webster’s Third New International Dictionary, 1966 Edition is as follows :

“Scholarship: A sum of money or its equivalent offered (as by an educational institution, a public agency or a private organization or foundation) to enable a student to pursue his studies at a school, college or university.”

Funk & Wagnalls Standard Dictionary, International Edition, which is reproduced as under :

“Scholarship Maintenance or a stipend for a student awarded by an educational institution.”

The Encarta World English Dictionary gives the following meaning to the word scholarship :

“Scholarship—Financial help for a student,

1. a sum of money awarded to a student on the basis of academic merit, to help with living expenses, study or travel,

2. formal study, academic learning or achievement,

3. academic works, a body of learning or an academic subject.”

Ritesh Jain (CA, CS in Job) (675 Points)
Replied 19 April 2010

I came to know that there is a caselaw :Sudhir Kr Vs ITO that upheld the nontaxability of stipend. ...but in no case I find that the stipend specially that which is received by CA student are in nature of scholarship.

So, 10(16) will not be applicable for the case as per my view...but I have not gone through case laws reffered by shweta.

Shhweta can u please mail me the text of the caselaw, if it is possible.

riteshsethi1 @ gmail.com

thanx

Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 19 April 2010

Where is the word stipend written in the judgement? And also from all the definations given above for scholarship no defination fits for Stipend i. e. in no defination stipend can be considered as Scholarship received to be exempt u/s 10(16). Also Scholarship Maintenance or a stipend for a student awarded by an educational institution. Also CA firms are not running educational institutions.

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Rohan (Article Assistant) (62 Points)
Replied 19 April 2010

Yea if possible please post the entire Judgement ...because 10(16) cannot be applied...

CA Ravi Sisodia (CA,CS,CMA) (32226 Points)
Replied 19 April 2010

exempted u/s 10(16)

CA Devanshi Gandhi (Ajani) (FCA DISA Mcom CIFRS & LLB) (9058 Points)
Replied 19 April 2010

not taxable

Ritesh Jain (CA, CS in Job) (675 Points)
Replied 20 April 2010

Dear members,

All those who have a view that it will not be taxable or some who are referring 10(16) as exemption mode......can please provide a back up or some legal text............i and my friends who were in big firms used to show it as a taxable income in our ITRs, though it was below basic limit thus were not taxed.

thanx