Tax treatment of award

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vikash kumar

vikash kumar (Querist)
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24 June 2014 Whether award received for obtaining 1st position in exam say FIITJEE is taxable under Income Tax Act?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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24 June 2014 depends on what exam this is.............

Rupesh Jain

Rupesh Jain (Expert)
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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

vikash kumar (Querist)
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27 June 2014 Which section of income tax deals with taxability of award received?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
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26 July 2025 ### 📌 Tax Treatment of Award (e.g. FIITJEE exam) under Income Tax Act

Let’s break it down clearly:

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## ✅ **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**.

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## 📘 **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.

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### 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"**.

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## ✅ 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 |

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### 💡 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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