ITAT Rules Medical Stipend of Rs 18.34L Exempt from Tax Under Section 10(16)

A postgraduate student pursuing a degree in General Surgery received a medical stipend of Rs 18.34 lakh but did not pay income tax on it. Tax authorities issued a notice to the student for non-payment of taxes on the amount received. The case was taken up before the Income Tax Appellate Tribunal (ITAT), which examined the applicability of Section 10(16) of the Income Tax Act. The tribunal ruled in favour of the student, holding that the stipend qualified as a scholarship granted to meet the cost of education. Under Section 10(16), such scholarships are fully exempt from income tax, providing relief to medical students in similar situations.