An individual Phd student is getting scholarship of 25000/-p.m from govt scheme, he is having PAN and bank account. After all education expenses the student invested all money around Rs. 6lakhs in Mutual Fund Scheme and Fixed Deposit and he is having NO INCOME till date.
Whether he need to file Income Tax Return.
If he wanted to file return which ITR form he should fill and under which category of income he should capture his income.
Please guide.
"Whether he need to file Income Tax Return."
Not for the scholarship receipts, as it is exempted u/s. 10(16). ([1984] 147 ITR 4 (MAD.)
Frankly, the only amount available for exemption, is upto the actual education expenses. If the grant is used for other purposes, as you mentioned above, that much amount has to be taxable in hands of the student or clubbed in parents' income (if applicable). Moreover, any income derived from MFs or FDs is also chargeable to tax. For ITR, I suppose ITR-1 would be sufficient, this income must be considered as IOS.
Saini Pati Shah & Co LLP, Chartered Accountants
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