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Stipend tax

17 July 2012

Hi,

My husband is a student getting stipend every month for Rs 25k.Is it Taxable.Any savings done from this income ie suppose he does a FD of 2 lacs in a year will the interest earned from this FD be taxable.What will the TDS that will be deducted from this interest.How can he save it? He has got an offer for a temporary position & he would get salary for the same.If the salary is 1.8k will it be taxable? Any interest earned from investment done from the salary will it be taxable.How does he save the tax? Please help.

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10 Replies

CA Sanjay Bag (CHARTERED ACCOUNTANT) (3345 Points)
Replied 17 July 2012

Please follow the following link.

https://www.hindu.com/thehindu/biz/2001/11/22/stories/2001112200310202.htm

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Shenba Associates (Partner) (115 Points)
Replied 17 July 2012

Income slab is for Individual Upto Rs. 2 Lakh is No tax for the AY 2013-14 (FY ended 31.03.2013)...

For your case, the FD interest is if exceeded the amount of Rs. 10K it will attract TDS for 10%. If your income is below the slab, then the TDS amount will get refund after filling your Income tax Return.

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CA Amit Jaiswal (Finance Manager) (2720 Points)
Replied 17 July 2012

Stipend is there to cover the cost of study, books etc. and is not taxable. Interest income is taxable under other sources. In order to save the TDS you can fill the prescribed form with the bank. The salary from job will be taxable subject to limits. As per current limits, your amt of Rs 1.8 Lacs will not be taxable. Interest amt will be taxable subject to exemption limits. Instead of depositing money in FD you can opt for PPF A/c, where you can deposit in the range of 500 to 70000 (in multiples of Rs. 500) for a year. Also the return will be tax free.

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Ashish (CA) (166 Points)
Replied 17 July 2012

Not taxable.

Ref the attach case.

Attached File : 298817 1017225 stipend case law.pdf downloaded: 405 times

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(Guest)

Stipend is to cover the cost of the course, books etc and hence not taxable.

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Ashwani Narnoli (.) (1843 Points)
Replied 17 July 2012

Yeah it is not taxable

Varshit Shah (Self Employed) (676 Points)
Replied 18 July 2012

Originally posted by : CA Amit Jaiswal
	Stipend is there to cover the cost of study, books etc. and is not taxable. Interest income is taxable under other sources. In order to save the TDS you can fill the prescribed form with the bank. The salary from job will be taxable subject to limits. As per current limits, your amt of Rs 1.8 Lacs will not be taxable. Interest amt will be taxable subject to exemption limits. Instead of depositing money in FD you can opt for PPF A/c, where you can deposit in the range of 500 to 70000 (in multiples of Rs. 500) for a year. Also the return will be tax free.

I totally agree but now u can deposit in PPF upto Rs.1 lakh.

raj shekhar (CA Final) (60 Points)
Replied 18 July 2012

yes the max limit to deposit in PPF is 70000 but under 80C of IT act, the deduction is restricted upto 100000 p.a.

neha vats (ca final) (76 Points)
Replied 18 July 2012

yes it is not taxable (Stipend). it is a gud suggestion to deposit in ppf but bank allow only upto Rs. 70000 but in income tax act it is allowed upto Rs. 1lac so u can deposit other Rs. 30000 in another bank.and on maturity is exempt.

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 18 July 2012

when stipend is to meet cost of books and other study materials how it can be saved in cash ? if its saved in cash form then its not used for the purpose , for which it was paid, hence it would go to "income from other sources" and would be taxed accordingly.