taxability of stipend

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brijmohanpareek (Querist)
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02 June 2010 though I agree with your contention that stipend is differen from salary but still I think there is no employer employee relationship between pricipal and trainee

Aditya Maheshwari

Aditya Maheshwari (Expert)
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02 June 2010 Have u read the form 102?

It reads as
Articles of apprenticeship made on the …………………………………….. day of ……………………………… Two

thousand ………………………………………………………between …………………………………………………

…………………………………………………………..of …………………………………………………………………..

……………………………………………………………………………………………………………………(hereinafter)

called the Employer) of the first part, *[…………………………………………………………………… the Chartered

Accountant in practice / partner of Messers ………………………………………………………………….Chartered

Accountants in practice, employing the Employer of the first part (hereafter called the second employer) of the

Second part] and ………………………………………………………………………………………………………….

………………………………………………………………………(hereinafter called the Articled Clerk) of the Second *third part

So how come no employer - employee relationship?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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02 June 2010 Even if the same is not taxable as salary income it is taxable as income from other sources.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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02 June 2010 Stipend received by an articled assistant is tax free.
Citation- Sudhirkumar Sharma Vs.ITO(1983)17 TTJ(Jp-Tri)228.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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02 June 2010 Dear Sir
The case law referred is of Sudhir Kumar Sharma (1983) 15 Taxmann 100 of ITAT Jaipur Bench.

Orders of the ITAT have no validity in the income tax laws and on the department. Further in the same case law there is mention that the same is applicable before introduction of rule 32B prescribing the minimum stipend rules was prescribed by the Institute which do not follow the follow the practice of paying a meager amount to meet the cost of books, fees, etc and hence cannot be termed as receipt for the purpose of meeting the cost of education to be exempt u/s 10(16).

CA Shiv

CA Shiv (Expert)
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02 June 2010 Agree to Aditya.

It is Definately taxable......

But wil lbe taxed in the IOS...

@ Aditya: Thanks for the form.. even i was not knowing it.. but i saw that Article is not treated as employee in the same form. SO i think it wil be under IOS only.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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02 June 2010 Yes it will be taxable under the head income from other sources only.

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