stipend

Page no : 2

CA Shiv (Business Controller) (2987 Points)
Replied 06 May 2010

Well, than in that matter it is defiantely taxed... no other way out for it..

Madhusudan Kabra (knowledge seeker) (1779 Points)
Replied 03 June 2010

This decision by Jaipur Tribunal is of immense help to all the articles for claiming stipend as exempt u/s. 10(16) of the Income-tax Act, 1961.

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, etc. – Sudhirkumar Sharma v. ITO – 15 Taxman (Mag) 100 (JP).

Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 03 June 2010

Dear Madhusudan,

The case law you are referring is of Sudhir Kumar Sharma (1983) 15 Taxmann 100 of ITAT Jaipur Bench. In the same case law there is mention that the same is applicable before introduction of rule 32B prescribing the minimum stipend rules was prescribed by the Institute which do not follow the follow the practice of paying a meager amount to meet the cost of books, fees, etc and hence cannot be termed as receipt for the purpose of meeting the cost of education to be exempt u/s 10(16).

So first please read the case law u are referring to and whether the same is applicable in current scenario or not should be verified before referring to the same.

2 Like

Madhusudan Kabra (knowledge seeker) (1779 Points)
Replied 03 June 2010

Thank u mr . Aditya ............................

CA Devanshi Gandhi (Ajani) (FCA DISA Mcom CIFRS & LLB) (9058 Points)
Replied 03 June 2010

its exempt

Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 04 June 2010

Dear Devanshi Gandhi

Please quote some section or any case law in support of your claim.

In the case law there is mention that the same is applicable before introduction of rule 32B prescribing the minimum stipend rules was prescribed by the Institute which do not follow the follow the practice of paying a meager amount to meet the cost of books, fees, etc and hence cannot be termed as receipt for the purpose of meeting the cost of education to be exempt u/s 10(16).

Even Madhusudhan who was supporting the case law is agreeing with me.