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Re : Stipend taxable or exempt

Akash Pincha (CHARTERED ACCOUNTANT) (188 Points)

05 December 2009

Is stipend which is given to an article assistant under CA course during articleship period, is taxable or exempt under Income Tax Act, 1961 ?

Please do specify the Case decided, if any based on which u give ur answer....

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63 Replies

Sushil (CA Final Student) (2571 Points)
Replied 05 December 2009

Case i don't know. But it is taxable if it crosses the basic exemption limit. There exists employer - employee relationship.

(Guest)

ya!! it is taxable if it cross the minimum exemption limit under the head Salary

Kamal Jain (FCA) (200 Points)
Replied 05 December 2009

Yes.

Kamal Jain (FCA) (200 Points)
Replied 05 December 2009

Yes, its taxable, subject to total income being more than minimum exemption limit which is Rs 160000/- for the current FY.

Akash Pincha (CHARTERED ACCOUNTANT) (188 Points)
Replied 05 December 2009

So you guys are saying that while computing gross total income we will take total stipend receive by the assessee during the previous year under the head salary.

CA CS Akashdeep Singh (Practicing CA) (1394 Points)
Replied 05 December 2009

Stipend is not taxable. Read the attached case law

Attached File : 50 16 articleship stipend 10 16 exemption case law.pdf downloaded: 944 times

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Akash Pincha (CHARTERED ACCOUNTANT) (188 Points)
Replied 05 December 2009

Income Tax Act is governed by the decision held in High court & Supreme court and not by the decisions held in Income Tax Appeallate Tribunal, so Akash deep the case suggested by you doesn't prove that stipend will not be taxable.

Vinay Kumar Bansal (CA FINAL Student) (500 Points)
Replied 05 December 2009

stipend is not taxable under income tax act

Akash Pincha (CHARTERED ACCOUNTANT) (188 Points)
Replied 05 December 2009

Mr. Vinay, plz provide the details where it is written that stipend is not taxable.........in the Income Tax Act, 1961 or any case held except that is given by akashdeep.

1 Like

CA RAJENDRA PANDEY (ACA B. Com AMFI NCFM NISM) (327 Points)
Replied 05 December 2009

It is exempt U/s 10(16) of IT Act, 1961

CA RAJENDRA PANDEY (ACA B. Com AMFI NCFM NISM) (327 Points)
Replied 05 December 2009

It is exempt U/s 10(16) of IT Act, 1961

subhash reddy (Student) (442 Points)
Replied 05 December 2009

Good question....it's taxable....

Sushil (CA Final Student) (2571 Points)
Replied 05 December 2009

Sec 10(16) of IT Act, 1961 says, "Any scholarship granted to meet the cost of education.Section 10(16)"

When a person gets scholarship there is no relationship of employer - employee like ICAI gives scholarship to rankholders of PCC, Backward class student on fulfillment of given criteria.
Literal interpretaion says that Stipend is not a scholarship and when a person gets stipend there exists employer - employee relationship...if it exceeds minimum exemption limit then its Taxable under the head Salary.