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TDS Deduction from stipend

akshay (CA) (30 Points)

01 August 2007

Dear all

I am in to my 3rd year articleship. TDS has been deducted on my stipend. Stipend doesnt form a part of salary and is exempt from tax. There is no employer employee relation. I have comunicated to the firm but the ans what i got is that its a firm policy. Is there any provision under which stipend is taxable. What should be my course of action? Please advice.

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16 Replies

aca.chand.bagaria (Chartered accountant) (42 Points)
Replied 01 August 2007

PLEASE CONFIRNM UNDER WHICH SEC, THEY ARE DEDUCTING TDS AND AT WHICH RATE. whether you are receiving stipned as per ICAI norm or else. make it clear for further observation. Is there is any seperate contract?

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Vijay (CA) (58 Points)
Replied 01 August 2007

Dear Friend, First you have to confirm under which section they are deducting your TDS. If they are deducting under Salary head then as per my opinion they are right. As per my opinion arcticle/audit cleark is as good as employee. So if your stipend crosses the maximum limit then TDS will de deducted. But you can take exemption on those part of salary that is expended by you for conveyance purpose.

(Guest)

TDS not to be deducted

(Guest)

Make a complain in C.A.institution

(Guest)

Hiii Stipend is exempt u/s 10(6). So TDS should not be deducted on it. Where as the Firms Policy cannot be contradictory to law. Case law: Sudhir Kumar Sharma vs ITO, Jaipur Bench.

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prakhar (student) (35 Points)
Replied 10 October 2007

dear friends, i want to say that the article posted by amit chaudhary is wrong , might be my friend has quoted a wrong section by mistake. the stipends are not taxable u/s 10(16) only if it is granted to meet the cost of education, irrespective of the fact whether the amount is utilised for the same purpose or any saving done from the same amount. case law: CIT vs. V.K. Balachandran (1984) 147 ITR 4 (MAD) & Dr. V. Mahadev v. CIT(1990) 51 Taxman 411/184 ITR 533 (MAD) thanks. Prakhar

Neeta Gupta (83 Points)
Replied 13 October 2007

hi! there is no liability of tds on stipend amt.kindly confirm them under which sec.they r deducting tds if its u/s 192B then this is treated as salary not stipend

Rahul Gupta (Article) (47 Points)
Replied 16 October 2007

hi! there is no liability of tds on stipend amt.if it has been deducted than plz ask the company under which section thy deducted.

CMA Gul S (Program Manager) (5910 Points)
Replied 16 October 2007

No TDS is to be deducted, please get this reconfirmed

Ripul (Student) (23 Points)
Replied 18 October 2007

I agreed with Mr. Vijay, TDS should be deducted. As it is clearly mentioned in the definition of stipend that A stipend is a form of payment or salary, such as for an internship or apprenticeship. It means it can be treated as a salary and TDS on same should be deducted if it crosses the prescribed limit

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(Guest)

Mr. Vijay can you please tell us the maximum limit for TDS to be deducted from stipend

Mukesh (Self employed) (71 Points)
Replied 28 December 2007

stipend is neither professional fees norcontract receipts, hence no liablity arise for tds

(Guest)

How much should be the exact time to get well prepared for the pcc exam for both the groups

(Guest)

hii i am working in an partnership firm in internal audit division but for last four years i am getting stipend now in this financial year onwards company is telling they will deduct TDS ON STIPEND PLS GUIDE US what to do

what is Rate of TDS

FROM S

SUDHIR