Stipend received is taxable income?

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S.Reddy (Querist)
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28 October 2015 hello everyone will stipend received by a article student comes under taxable income or not? and please provide the reference to your answer

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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28 October 2015 Under Section 10(16) of the Income-tax Act, any scholarship granted to a person to meet the cost of education is exempt from tax. The term ‘scholarship’ has been interpreted liberally to also include within its scope and ambit, amounts of fellowships, stipends, grants for travel and incidental expenses, etc. awarded for acquiring education.

Income-tax Appellate Tribunal, Jaipur Bench has in the case of ‘Sudhirkumar Sharma vs. ITO’ 17 TTJ 226, also held that the stipend received by an Article Clerk from a Chartered Accountant is exempt, since it is not paid for rendering services by the Article Clerk, but is paid to him to meet the cost of books, coaching fee, examination fee, etc.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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28 October 2015 Further Citations:

‘CIT vs. V.K. Balachandran’ 147 ITR 4

A. Ratnakar Rao vs. Addl. CIT 128 ITR 527 (Kar).

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