Upto which slab of stipend is income tax exempted?

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Gauri (Querist)
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01 October 2009 Dear All,

I represent the HR of an MNC. We have many project trainees associated with us for various assignments. Some of them have completed more than a year and are still associated with us as project trainees.
Kindly guide on the slab / maximum level of stipend for which income tax is exempt.
Assuming a situation if we pay out stipend equivalent to INR 20,000 per month will that be exempt from income tax.

Kindly guide on this.

Thanks in advance,

Gauri R.

Krunal Raichura

Krunal Raichura (Expert)
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01 October 2009 Stipend paid to a CA student during articleship is non-taxable. There is a case law on the same which is available in share files section.

Gauri

Gauri (Querist)
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01 October 2009 Hi Krunal,

Actually I wanted to know the details for stipend to technical trainees viz. programmers, designers, testers, etc. Assuming that we pay out a stipend of INR 20,000 per month which annually becomes INR 2,40,000 then is Income tax applicable to such trainees.

Look forward to hear from you soon.

Thanks & Regards,

Gauri

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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01 October 2009 Stipend is exempted under section 10(16) of The income tax Act,1961.

Citation :- Dr.Tahul Tugnait Vs. ITO (2009) 315 ITR 139 (Chd-Tri)

Quantum of the payment is immaterial. The payer has to satisfy/prove that there is no employer employee relation ship exists for the said payment

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