Taxability on Stipend received by students

there is no employer employee relationship therefore stipend will be taxable in the hand of student under the head of income from other sources.

vikash mangal

Vikash,

yes i agree that there is no employee employer relationship but because of it , it will not be taxed under head salary and not income from other sources. I have doubt whether it is professional income or not ??

Hello shriti... It will be taxed in head income from salary only as there is indirect relationship between employer and employee.

ANd its not professional income.....Stipend can be termed as pay in the form of salary also...

Pleae correct if i m worng..

Stipend paid to article trainee is fully exempt from income tax. This has
been  decided in the ITAT jaipur bench Sudhir K Sharma v/s ITO....................

However, the contary on this issue is as under:

Stipend is no where expressly exmepted from tax under the IT Act. Thus
Stipend can  certainly be a  taxable income if it is  given as a cost of
living or as wages or salary or for any purpose other than for studies .
However, if the stipend is given for further education or gaining knowledge
, then the same can be claimed as  exemption u/s 10(16) of the I T act .
There is a decided case in the High Court of Karnataka in this regard.

So, to conclude with,  the taxability of the stipend has to be decided on
the basis of circumstances of each case.

regards,

ratan