Tax on Article Stipend

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Rajesh Goyal (Querist)
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21 December 2009 Dear Sir/Madam,
Is the stipend received by an article assistant exempted from Income Tax U/s 10(16) of the IT Act, 1961, as it states that "any scholarship received by an student to meet the cost education is fully exempted".

And if it not so, whether such income is liable for tax deduction, assuming it crosses the basic exemption limit.

Please help
Regards,

Navin

Navin (Expert)
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21 December 2009 Article Stipend is taxable. Sec 10(16) doesnt include Stipend paid to Articles. Further there is no exemption or deduction available towards Stipend. But i guess you shouldnt be bothered as Stipend will never exceed basic exemption limit.

CA Devanshi Gandhi (Ajani)

CA Devanshi Gandhi (Ajani) (Expert)
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21 December 2009 its exempt income

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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21 December 2009 Stipend is exempted under section 10(16) of The income tax Act,1961.

Citation :- Dr.Tahul Tugnait Vs. ITO (2009) 315 ITR 139 (Chd-Tri)

Quantum of the payment is immaterial. The payer has to satisfy/prove that there is no employer employee relation ship exists for the said payment.

Income-Tax Appellate Tribunal, Jaipur Bench in Sudhir Kumar Sharma versus ITO (1983) 15 Taxman 100 (Mag.).
The Tribunal in this case had held that the stipend received by an articled clerk from a Chartered Accountant was 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.

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CA Ravi Sisodia

CA Ravi Sisodia (Expert)
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21 December 2009 yes, its exempt from tax u/s 10(16)

Girish Agrawal

Girish Agrawal (Expert)
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06 October 2014 Stipend, prima facie, should be treated as a scholarship and should be exempt, since Sec. 10(16) exempts all ``scholarships granted to meet the cost of education''. In CIT v V. K. Balachandran (1984) 147 ITR 4 (Mad)

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