Stipend
This query is : Resolved
17 February 2009
Hi sir/madam
Whether the stipend received by the Article Assistant is taxable or not,Please explain with reason?
Whether the stipend received by the Article Assistant is taxable or not,Please explain with reason?
17 February 2009
It is taxable under the head "Salaries".
As per the definition of salary, it includes
1.Wages
Wages are wages as defined in factory wages act, 1948 which includes amount received by an apprentice.
As per the definition of salary, it includes
1.Wages
Wages are wages as defined in factory wages act, 1948 which includes amount received by an apprentice.
17 February 2009
No. Stipend is not taxable at all. It has been decided by the court already. Mentioned somewhere else on this website itself.
18 February 2009
Sir I didnt get clarity One person b4 u said "that amt is taxable".
Again U R saying it is not taxable,if u r right,plz shall I know which court declared,when it was declared & is there any caselaw relating to it
Again U R saying it is not taxable,if u r right,plz shall I know which court declared,when it was declared & is there any caselaw relating to it
19 February 2009
For your doubt clarification, I am quoting the views of an expert 'Miss Komal Mantri' who had given a very good reply of the similer question a few days back
"The view that stipend is not taxable is taken in the light of Section 10(16), under which, scholarships granted to meet the cost of education is exempt. In this connection it may be noted that the Income Tax Appellate Tribunal, in Sudhir Kumar Sharma vs ITO (1983 15 Taxman 100 Jaipur Mag) has held that the stipend received by an articled clerk from a chartered accountant is exempt under Section 10(16).
The reason given by the Bench was that the stipend was paid to meet the cost of books, coaching fees, examination fees, and so on.
Reference may also be made to the ITAT decision in ITO vs Dr. G. N. Ramachandran (1 ITD 902 Bangalore) where it held that stipend received to meet the cost of education would be exempt under Section 10(16).
It is felt that the ratio of these decisions will apply to the stipend received by you for pursuing a super-speciality course in urology."
"The view that stipend is not taxable is taken in the light of Section 10(16), under which, scholarships granted to meet the cost of education is exempt. In this connection it may be noted that the Income Tax Appellate Tribunal, in Sudhir Kumar Sharma vs ITO (1983 15 Taxman 100 Jaipur Mag) has held that the stipend received by an articled clerk from a chartered accountant is exempt under Section 10(16).
The reason given by the Bench was that the stipend was paid to meet the cost of books, coaching fees, examination fees, and so on.
Reference may also be made to the ITAT decision in ITO vs Dr. G. N. Ramachandran (1 ITD 902 Bangalore) where it held that stipend received to meet the cost of education would be exempt under Section 10(16).
It is felt that the ratio of these decisions will apply to the stipend received by you for pursuing a super-speciality course in urology."
19 February 2009
I hope now you will be clear.
20 February 2009
Ya,thank u sir,
I am investing in shares with my stipend amount whatever i get then, I earned profits also, what will be your answer please?
I am investing in shares with my stipend amount whatever i get then, I earned profits also, what will be your answer please?
25 July 2025
Great question! Here’s the breakdown:
1. **Is stipend taxable?**
Generally, stipend received by an articled assistant or student for training is considered **exempt from tax** under **Section 10(16)** of the Income Tax Act, as it is treated like a scholarship meant to meet education-related expenses (books, coaching fees, exam fees, etc.).
This is supported by ITAT rulings like:
* *Sudhir Kumar Sharma vs ITO (1983)*
* *ITO vs Dr. G. N. Ramachandran*
2. **What about profits from investing stipend?**
Now, **if you invest the stipend money in shares and earn profits**, those profits (capital gains or dividends) are **taxable under the relevant heads** of income:
* **Capital gains** from sale of shares
* **Dividend income** (subject to applicable tax rules)
**So, in short:**
* The stipend itself is exempt as it’s like a scholarship.
* Any income earned by investing that stipend (like profits from shares) is taxable as per normal income tax rules.
If you want, I can help explain how capital gains tax works on shares. Would you like that?
1. **Is stipend taxable?**
Generally, stipend received by an articled assistant or student for training is considered **exempt from tax** under **Section 10(16)** of the Income Tax Act, as it is treated like a scholarship meant to meet education-related expenses (books, coaching fees, exam fees, etc.).
This is supported by ITAT rulings like:
* *Sudhir Kumar Sharma vs ITO (1983)*
* *ITO vs Dr. G. N. Ramachandran*
2. **What about profits from investing stipend?**
Now, **if you invest the stipend money in shares and earn profits**, those profits (capital gains or dividends) are **taxable under the relevant heads** of income:
* **Capital gains** from sale of shares
* **Dividend income** (subject to applicable tax rules)
**So, in short:**
* The stipend itself is exempt as it’s like a scholarship.
* Any income earned by investing that stipend (like profits from shares) is taxable as per normal income tax rules.
If you want, I can help explain how capital gains tax works on shares. Would you like that?
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