Dear Sir,
My wife is a doctor and is currently pursuing post graduation at a Government Medical College. During FY2017, She has received total stipend of Rs 5,16,000.
The income tax department guidelines for tax on Stipend is a bit confusing. I want to know what deductions she can avail. Can she get deduction on her tution fee paid to the college? Can she avail expenses made on books or on attending out of station conferences? No investment done under 80C, 80D, etc. No education loan or home loan is there. Please guide.
3 Answers
Hi,
For this we must review the terms under which such Stipend is paid ;
When Stipend is paid to further a person’s education, we need to test whether it qualifies as a Scholarship. As long as this has been paid purely in pursuit of a person’s education and is in the nature of a scholarship it shall be exempt. Research fellowships, grants received from universities may all be exempt when their nature is to support further education.
When Doctors receive Stipend at hospitals – Usually doctors earn stipend as they pursue a higher degree at a hospital. Such work by the doctor is similar in nature to that of a full time employee. The doctor is gaining experience from such work and performing duties like regular doctors – in such cases your Stipend may be taxed.
Taxed under which head – If your payer has already deducted tax and issued you a form 16 this shall be taxed under the head Salaries otherwise this is usually taxed under the head Income from Other Sources.
Do note that if you are earning a Stipend which is taxable, no deduction is allowed for any expenses that you have incurred to earn the stipend.
However, tax deductions (if any) can be claimed under Section 80c/80d etc.,
References :
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Dear Sreekanth, thanks for your reply. Let me open up more. The concerned Medical College historically didn’t deduct tax from any of the student’s stipend. Nor do they issue form 16 or any other similar document. This year in February suddenly they started deducting tax. Now, for FY2017 and AY2018, when neither tax was deducted nor I did any investment. How to file income tax return for the same period.
Hi,
Are you referring to filing of taxes for FY 2017-18 (or) FY 2016-17?
For filing of taxes, suggest you to kindly consult a CA.
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