Taxability of stipend income

[squarecb]

Dear members,

Please let me know if the stipend received by an article trainee from his Chartered accountant firm taxable under Income from salaries in the hands of article trainee? Assumption is the stipend received is in excess of the basic exemption limit for AY 2010-11?

Sent from my Nokia phone

[chakri hegde]

Hi,

 

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.

 

Contrary views are invited..........................

--
Find eNewsletters of ICSI Mysore at: http://www.icsi.edu/NewsEvents/enewsletters/tabid/1757/Default.aspx  AND www.esnips.com/web/icsimysore

You received this message as you are subscriber. To unsubscribe email to: csmysore-u...@googlegroups.com

To unsubscribe from this group, send email to csmysore+unsubscribegooglegroups.com or reply to this email with the words "REMOVE ME" as the subject.

--
---------------------
With Best Wishes
Chakri G Hegde
Nissin Foods India Ltd.
Bangalore

[squarecb]

So can the assessee claim exemption under the pray that stipend is provided to cover the cost of studies etc under 10(16)??

Can anyone put more light on the issue??

Sent from my Nokia phone