Tax liability for scholarship payment
Please read the following passage-
Currently each scholar is given the financial support as follows:
Fellowship:
Year 1: Rs 25,000 p.m.
Year 2: Rs 27,500 p.m.
Year 3: Rs 30,000 p.m.
Year 4: Rs 33,000 p.m.
Contingency grant : Rs 25,000 p.a.
Equipment grant : Rs 50,000
Query-
1. Whether TDS Deduction on above payment is applicable or not?
2. Under which section TDS will deduct?
3. Describe the Tax liability in both hands?
Replies (3)
As per S.10(16) scholarships granted to meet the cost of education are fully exempted. If these scholarships are indeed for meeting the cost of education then its fully exempt and hence there shall be no applicability of TDS.
Sir,
It is exempt u/s 10(16), If these scholarships are indeed for meeting the cost of education. How it will related to above cited problem whether those amount released for meeting the cost of education.
Please clarify.
It is related because if that amount is for the aforementioned purpose then there would be no liability to deduct the tax. It would be ultravirus to deduct any tax on an exempted income.
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