Tax treatment of award
This query is : Resolved
vikash kumar
(Querist)
24 June 2014
Whether award received for obtaining 1st position in exam say FIITJEE is taxable under Income Tax Act?
Nikhil Kaushik
(Expert)
24 June 2014
depends on what exam this is.............
Rupesh Jain
(Expert)
25 June 2014
you have to not mention the exam, but mostly award not giving by central govt. state govt. will be taxable.
vikash kumar
(Querist)
27 June 2014
Which section of income tax deals with taxability of award received?
26 July 2025
### 📌 Tax Treatment of Award (e.g. FIITJEE exam) under Income Tax Act
Let’s break it down clearly:
---
## ✅ **Is the Award Taxable?**
Yes, **most awards, scholarships, and prizes** are **taxable** **unless specifically exempted** under the Income Tax Act.
In your example:
* The award is given for securing 1st rank in an **FIITJEE exam** (a **private coaching institute**, not a government body).
* Hence, **it is not exempt under any special provisions** like government awards or scholarships.
So, the amount received is **taxable**.
---
## 📘 **Relevant Section**:
### 🔹 **Section 56(2)(x)** & **Section 10(17A)**
### 1. **Section 10(17A)** – *Exempt Awards*
Only awards that are:
* **Instituted by Central or State Government**, or
* **Approved by the Government** (like Padma awards, sports awards, etc.)
→ These are **exempt from tax**.
🛑 FIITJEE awards do **not qualify here**, as it is a private institution.
---
### 2. **Section 56(2)(x)** – *Income from Other Sources*
If you receive any **cash or kind** (without consideration) above ₹50,000 from a **non-relative**, it is taxable under this section.
➡ So, FIITJEE award amount is taxable as **"Income from Other Sources"**.
---
## ✅ Conclusion:
| Item | Taxable? | Section | Notes |
| ------------------------------------------------- | -------- | -------- | --------------------------------------- |
| FIITJEE award for rank | ✅ Yes | 56(2)(x) | Treated as gift/prize from private body |
| Govt-recognized award (e.g. Arjuna, Bharat Ratna) | ❌ No | 10(17A) | Exempt if notified by Govt |
---
### 💡 Tip:
If the award is a **scholarship** for education purposes, it may be **exempt under Section 10(16)**.
But if it's a **cash prize** for performance, it's **taxable**.
Let me know if you need help computing tax on a specific prize amount.
Let’s break it down clearly:
---
## ✅ **Is the Award Taxable?**
Yes, **most awards, scholarships, and prizes** are **taxable** **unless specifically exempted** under the Income Tax Act.
In your example:
* The award is given for securing 1st rank in an **FIITJEE exam** (a **private coaching institute**, not a government body).
* Hence, **it is not exempt under any special provisions** like government awards or scholarships.
So, the amount received is **taxable**.
---
## 📘 **Relevant Section**:
### 🔹 **Section 56(2)(x)** & **Section 10(17A)**
### 1. **Section 10(17A)** – *Exempt Awards*
Only awards that are:
* **Instituted by Central or State Government**, or
* **Approved by the Government** (like Padma awards, sports awards, etc.)
→ These are **exempt from tax**.
🛑 FIITJEE awards do **not qualify here**, as it is a private institution.
---
### 2. **Section 56(2)(x)** – *Income from Other Sources*
If you receive any **cash or kind** (without consideration) above ₹50,000 from a **non-relative**, it is taxable under this section.
➡ So, FIITJEE award amount is taxable as **"Income from Other Sources"**.
---
## ✅ Conclusion:
| Item | Taxable? | Section | Notes |
| ------------------------------------------------- | -------- | -------- | --------------------------------------- |
| FIITJEE award for rank | ✅ Yes | 56(2)(x) | Treated as gift/prize from private body |
| Govt-recognized award (e.g. Arjuna, Bharat Ratna) | ❌ No | 10(17A) | Exempt if notified by Govt |
---
### 💡 Tip:
If the award is a **scholarship** for education purposes, it may be **exempt under Section 10(16)**.
But if it's a **cash prize** for performance, it's **taxable**.
Let me know if you need help computing tax on a specific prize amount.
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