Dear Pon, I would highly appriciate, if you could provide some case laws for exemptions provided for scholorships and stipend under Income Tax Act. It may be useful for us. Best Regards, Divakar
From India, Bangalore
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9From India, Bangalore
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As per my best knowledge, any trainee is coming for training purposes, which indirectly states that their approach is to acquire knowledge/skills for the said reason. Stipend is paid, which is a periodic payment, especially a scholarship or fellowship allowance granted to a student. Here, the employee-employer relationship does not exist, and no labor law is applicable, whether it is ESI/PF/MW/TDS, etc.
But I would like the seniors to guide further.
From India, Ahmadabad
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But I would like the seniors to guide further.
From India, Ahmadabad
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You can refer to the cases highlighted in the article: [The Hindu : Stipends are not taxable](http://www.hindu.com/thehindu/biz/2001/11/22/stories/2001112200310202.htm)
From India, Lucknow
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From India, Lucknow
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STIPEND IS ONLY TAX FREE IN CASE OF \"STUDENT\" IS STUDYING ANY COURSE AS PER RULES OF UNIVERSITY OR AICTE THEN ONLY THE STIPEND IS TAX FREE. IT IS CALLED AS \"VIDYA VETAN\". RAMAKANT
From India, Pune
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From India, Pune
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Agree with Ramakanth.
Section 10(16) of the Income Tax Act provides for an exemption of scholarship received to meet the cost of education. This is required to be paid for the pursuit of knowledge, resulting in awarding a degree/completion of an educational course that is exempt. However, any payments received for training that do not amount to education/recognized courses by an educational institute do not qualify for exemption. The facts of the case specified in the post are clear, and any amount paid is chargeable to tax under the Income Tax Act.
Best Regards,
Divakar
From India, Bangalore
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Section 10(16) of the Income Tax Act provides for an exemption of scholarship received to meet the cost of education. This is required to be paid for the pursuit of knowledge, resulting in awarding a degree/completion of an educational course that is exempt. However, any payments received for training that do not amount to education/recognized courses by an educational institute do not qualify for exemption. The facts of the case specified in the post are clear, and any amount paid is chargeable to tax under the Income Tax Act.
Best Regards,
Divakar
From India, Bangalore
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Dear Mr. Divkar,
Thank you. The stipend is applicable in the case of an educational institute only. I think in this case, the payment made to the "Trainee" can be treated as a contractual employee and handled under section 92A. Otherwise, it will fall under u/s. 95j.
Ramakant
From India, Pune
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Thank you. The stipend is applicable in the case of an educational institute only. I think in this case, the payment made to the "Trainee" can be treated as a contractual employee and handled under section 92A. Otherwise, it will fall under u/s. 95j.
Ramakant
From India, Pune
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