Tds

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Querist : Anonymous

Querist : Anonymous (Querist)

05 August 2013 Dear Sir/Mam
>My friend is pursuing M.TECH from university and received stipend.
>which is exempt u/s 10(16), however TDS on that income is deducted by concerned entity. >entity say you have to brings approval application from your A.O. then TDS not to be deducted. otherwise same thing going on.

please guide me what is the procedure to be followed for the same.....

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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05 August 2013 Alike scholarship the stipend amount is not directly covered by 10(16). If the amount is nominal and to cover the educational expenses only, then only it is exempt. If the same amount has been received as scholarship it can be claimed as exempt. So, I do not think that, the AO will take any contrary view and allow exemption.
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However , for non-deduction of TDS you may refer Section 197 and rules prescribed thereunder.

Querist : Anonymous

Querist : Anonymous (Querist)

05 August 2013 But SIR(PARASH BAFNA) as i see various decision in Favor of assessee like....
1) ITAT chandigarh bench in the case of Dr. Rahul Tugnait Vs. ITO.
2)Allahabad High Court Decision in the case of commissioner of income tax Vs B.L. Garg
3)Karnataka High Court Decision In the case of A. Ratnakar Rao Vs Additional CIT..

in all cases Department take it as taxable but as the decision given in above case...

it is clarify The considerations which make up the concept of a “Scholarship for meeting the cost of education” in s. 10(16} are that the payment is intended to be an income receipt in the hands of the scholar and that whatever is paid is intended to meet the cost of education of the recipient. Since the purpose of the payment is to meet the cost of education, the question whether the quantum of payment is adequate or inadequate, or, is or is not in excess of the requirements are all beside the point.
and also in the case of girish saran Vs acit the tribunal allowed that the tax payer claim exemption u/s 10(16)having preview the fact that the recipient does not spend the whole of the amount or saves something out of it or utilise for other purpose would not detract corrector of stipend.

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