Taxability of Stipend Received

It is taxable. The case law cited is no longer relevant.

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Very Nice Discussion.... its taxability or otherwise depends on case to case basis.

But the comments from Mr. U S Sharma very useful and guiding.

Thanks

Aditya Sir is RIGHT...

Stipend is taxable....  It is not exempt......

Taxable under IOS.....

There is no case relevant for that and it is not covered under section 10(16) ... Its neither a scholarship nor payment for cost of education....

My view regarding taxability of stipend is as under: -

1. Master servant relationship is established between CA Trainee and Principal. As Article Student would be working under the guidance of Prinaipal. (CA Firm or Industrial Trainee.) 

2. It would be considered as Salary (most appropriate).

3. Rs. 2.50 lakh is exempt under normal limit. Rs 50,000/- Standard deduction would be available. (So up to Rs 3 lakh no tax.   

4. This would be  appropriate way to consider the taxability.

5. Whole amount cannot be considered as cost of education and subject to exemption u/s 10(16) unless specifically reimbursed for the same.