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pawan kumar (Querist)

08 August 2013 SIR Kindly gives your opinion

>I am CA final in Training for 1 yr more and recd stipned of rs 19500 p.m i.e. 234000 P.A.
>in this case should TDS deducted on that income
>because this fall under section 10(16)
>if yes, under which section
>my employer/principal deduct u/s 192, however this is exempted income
>I cant understand logic for deducting TDS
please guide me......

@VaibhavJ

@VaibhavJ (Expert)

08 August 2013 Hi,

The payment received by you is in nature of Salary & TDS applicable u/s 192.

How stipend received by you exempt can you explain?

Rg//Vaibhav

pawan kumar

pawan kumar (Querist)

08 August 2013 >now i m in article ship with CA firm and recd stipend for securing further study
>there no employee-yer relation ship
>and satisfying all condition of stipend laid down by H.C. & ITAT
>under which stipend categories u/s 10(16)
and as per H.C. quantum of payment, saving out of it is not detract nature of stipend...

@VaibhavJ

@VaibhavJ (Expert)

08 August 2013 Under 10(16) scholarship is exempted & not a stipend.

So are you receiving Stipend or Scholarship?

If you are receiving stipend from your CA then same can not be termed as scholarship for further studies to claim exemption.

Also Scholarship is exempt only if it is granted to meet cost of education. So if you are doing CA then its cost of education is not as high as Rs. 19.5K p.m.

Rg//Vaibhav

@VaibhavJ

@VaibhavJ (Expert)

pawan kumar

pawan kumar (Querist)

08 August 2013 But vaibhav sir kindly go through following fact and cases

stipend/scholarship is define under same categories by h.c. and comes under same section 10(16) in favor of assessee and quantum of pmt & saving out of it does not detract stipend/scholarship nature.
>> in case of
> A. ratnakar rao vs addl cit by karnata h.c
>dr rahul tugnait vs income tax officer
>sudhir kumar sharma(c.a. trainee) vs ito

@VaibhavJ

@VaibhavJ (Expert)

08 August 2013 Hi Pawan,

The Income-tax Appellate Tribunal, Jaipur Bench has in the case of ‘Sudhirkumar Sharma vs. ITO’ 17 TTJ 226, held that the stipend received by an Article Clerk from a Chartered Accountant is exempt, since it is not paid for rendering services by the Article Clerk, but is paid to him to meet the cost of books, coaching fee, examination fee, etc.

Hence you need to prove to your employer & also to ITO if required the purpose of the payment is to meet the cost of education ans stipend earned by you.

Also you should have performed your training as prescribed by ICAI and not at par with other employee of your CA Firm.

It is difficult for your HR to substantiate above facts as per my knowledge.

Thanks!!

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