URGENT QUERY

Stipend received during articleship is taxable under the head income from other sources.

A detailed discussion has been made in /forum/stipend-81580.asp where it has been held that stipend is taxable.

This decision by Jaipur Tribunal is of immense help to all the articles for claiming stipend as exempt u/s. 10(16) of the Income-tax Act, 1961.

The stipend received by an Article Clerk from a Chartered Accountant is exempt, since it is not paid for rendering services by the Article Clerk, but is paid to him to meet the cost of books, coaching fee, etc. – Sudhirkumar Sharma v. ITO – 15 Taxman (Mag) 100 (JP).

Regards

Madhusudan Kabra

Stipend received is exempt fom tax.

Dear Madhusudan,

The case law you are referring is of Sudhir Kumar Sharma (1983) 15 Taxmann 100 of ITAT Jaipur Bench.

Orders of the ITAT have no validity in the income tax laws and on the deaprtment. Further in the same case law there is mention that the same is applicable before introduction of rule 32B prescribing the minimum stipend rules was prescribed by the Institute which do not follow the follow the practice of paying a meager amount to meet the cost of books, fees, etc and hence cannot be termed as receipt for the purpose of meeting the cost of education to be exempt u/s 10(16).

hell, sir

i have a problem related with tds, actually in - Section - 194 c - if the transporter shows a PAN card on that case he is not liable to deduct tax, i want to know that is any limitation of such amount wich is not liable to deduct tax or it is fully exempted while transporter shows the PAN Card.

Please reply soon.

fully exempted while transporter shows the PAN Card.

Still no clear clarification

Ankur sir where are you?

In Sudhir Kumar verma Vs ITO, the assesse claimed that stipend was exempt u/s 10(16) on various grounds like- learning, no contribution expected, to meet cost of books, coaching fee, examination fees etc...The decision was finally given in assessee's favor.

So Stipend received is exempted from TAX

I agree to Mr. Madhusudhan.....The Stipend received by the artcle clerk is exempt u/s 10(16).....follow the decision of Jaipur Tribunal.

Hii...

The Stipend Income is taxable & not exempt

The above judgement Sudhir Kumar verma Vs ITO (1983) got overruled later...  stipend is very much taxable ..

Also Mr. Maheshwari has rightly said "Orders of the ITAT have no validity in the income tax laws and on the department"

TDS is deducted from the stipend of all those article assistants who are getting the yearly stipend exceeding the exemption level. You can ask any of the BIG 4 articles / or those undergoing Industrial Training.

So, be prepared for paying taxes.

Correct me if I am wrong.

Hi

I agree to Mr. Madhusudhan.....The Stipend received by the artcle clerk is exempt u/s 10(16).....follow the decision of Jaipur Tribunal.

Hi

I agree to Mr. Madhusudhan.....The Stipend received by the artcle clerk is exempt u/s 10(16).....follow the decision of Jaipur Tribunal.

Hi

I agree to Mr. Madhusudhan.....The Stipend received by the artcle clerk is exempt u/s 10(16).....follow the decision of Jaipur Tribunal.

Please read the case law u are referring to

In the case law there is mention that the same is applicable before introduction of rule 32B prescribing the minimum stipend rules was prescribed by the Institute which do not follow the follow the practice of paying a meager amount to meet the cost of books, fees, etc and hence cannot be termed as receipt for the purpose of meeting the cost of education to be exempt u/s 10(16).