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stipend received by audit assistant

rahul (CA Final student) (76 Points)

15 November 2007

pls tell me

whehter stipend reced by an articled student is taxable in the hands of receipent?? if yes under which head of incom..??

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12 Replies

CA Harbinder (CA ) (1245 Points)
Replied 15 November 2007

yes it's taxable in the hands of the rcpnt and will be taxable under the head salary, but if it increases Rs.1,10,000.as u know. hv a nice day

(Guest)

But i don't agree... For any income to fall under the head salary, the condition is to have an employer-employee relationship. but an article is not an employee. so the income will not be charged under salary. But i guess it should be 'income from other sources'.

Vijay K. Agrawal (Service) (608 Points)
Replied 15 November 2007

income from other source

KAAPIL (COACHING ) (11717 Points)
Replied 15 November 2007

Income from other sources.

Pat (Student) (40 Points)
Replied 15 November 2007

It is exempt U/s 10(16). Case Law : Sudhir Kumar Sharma v/s ITO (1983)(Jaipur-Tb).

1 Like

Renu (Articles) (49 Points)
Replied 22 November 2007

Hey Pat, pls could u provide me with the citation no., of that case law. i made an effort but couldn't find that case law.

Manindar Kakarla (C.A.Student) (42 Points)
Replied 24 November 2007

Stipend will not be considered as income because any amount paid for meeting cost of education is exempt u\s 10(16) for better understanding refer the section and case laws from Incometaxindia.gov

Pat (Student) (40 Points)
Replied 01 December 2007

@ Renu Hi, Send me your id. I'll send you the case itself.

nagabhushanam (student) (28 Points)
Replied 01 December 2007

up to limits fixed by institute is exempt as an exp for education . above is taxable under other heads

Vk Duggal (320 Points)
Replied 04 December 2007

Scetion 10(16) states Scholarship and not stipend. Minimum stipend paid by the CA Firm is fixed by the Institute of Chartered Accountant and does not mean that it is towards meeting cost of education. Stipend is paid regardless of ability, income structure or any other criteria. Whereas Scholar ship is usually give to a person based on performance, income grade or other criteria and all students will not be eligible for the scholarship in that route. Hence, it would be incorrect to claim that stipend will be exempt

(Guest)

Hi Pat.... Please send me the case of Sudhir Kumar.... If possible send me the ITR No. or any other link

M.Sriram Shenoy (CA Final) (814 Points)
Replied 12 February 2008

Stipend received by an articled clerk is EXEMPT EXEMPT EXEMPT. As per the view of ITAT Jaipur Bench "A graduate who has joined as an audit clerk doesnot have knowledge to do works of a Chartered Accountant and so it cannot be said that the stipend was paid for the services rendered by him. Stipend is paid to meet; (a) Cost of education (b) Cost of books (c) Examination fees etc. of the articled clerk.