Is there any tax liability for scholarships or awards received for meritorious students?


#1

Is there any tax liability for scholarships or awards received for meritorious students?


#2

Any kind of scholarship or award granted to any deserving person should be received to meet the cost of education and is therefore exempted from tax under Section 10(16) of the income tax act of 1961. There is no cap on the maximum limit and the entire sum of money received as a scholarship gets the tax exemption treatment.


#3

Hi Meera,

Any income that an individual acquires or earns during the course of a financial year that is deemed to be non-taxable is referred to as ‘Exempt Income’. As per the Income Tax Act, there are specific kinds of income that are exempt from tax as long as these types of income fulfil the guidelines and provisions outlined in the Act. Scholarship is one such exempt income. Others are:

Section 10(10C) - Compensation in lieu of retirement from a PBC or any other firm

Section 10(10CC) - Any income received through taxation on perquisites

Section 10(10D) - Any amount acquired via a life insurance policy

Section 10(11) - Any payment received via the Statutory Provident Fund

Section 10(12) - Any payment received via a recognised or authorised Fund

Section 10(13) - Any payment received through a Superannuation Fund

Section 10(13A) - House Rent Allowance

Section 10(14) - Allowances utilised to meet business expenses

Section 10(15) - Income received in the form of interest

Section 10(15A) - Income received by an Indian firm through the lease of an aircraft from a foreign firm or government

Section 10(16) - Income in the form of a scholarship

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