01 March 2009
normally its taxable but if Stipend is for further education or gaining knowledge i.e. in nature of scholarship (meeting the cost of education) than its exempt u/s 10[16] of the I T act. it can b claimed as exempt income.
01 March 2009
Ms.Devanshi, the Madras High Court in CIT Vs. V.K. Balachandran's case reported in (1984) 147 ITR 4 deceided that the whole amount of scholarship received need not be spend for claimimg exemption u/s 10(16).
02 March 2009
form in which scholarship is received is important and not its application to claim exemtion U/S 10(16).i.e it should be related to education and nt in the form of salary or anyother.
02 March 2009
Good discussion. Thanks to Warrier Sir and Ms. Devanshi for our updations. But what is the ultimate solution. Is the articleship stipend taxable or not? And please let us know what is the decision in SUdir Kumar Vs ITO case.
02 March 2009
I think their discussion indicates that articles stipend is taxable as it is not for further education, as explained by Ms. Devanshi in her first reply.
02 March 2009
its exempt if object is to meet cost of education i.e. if it is paid only for meeting the cost of education, even if its not spent. the exemption in the hands of recipient depends on what it is meant for the person paying or distributing the scholarship. now question is Stipend which we get during our Articleship period is to meet cost of education ???? what the CA Act says about this??
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