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Got a stipend while studying? ₹18.34 lakh ITAT case explains when students can claim income-tax exemption
A postgraduate medical student received ₹18.34 lakh as a stipend from Aligarh Muslim University, but the Income Tax Department treated it as taxable salary. The Delhi ITAT held that the stipend was linked to her education and compulsory residency training and allowed the Section 10(16) exemption.
A postgraduate medical student received ₹18.34 lakh as stipend from Aligarh Muslim University while pursuing an MS in General Surgery. The Income Tax Department treated the amount as taxable salary, but the Delhi Income Tax Appellate Tribunal (ITAT) has deleted the addition, holding that the stipend was connected with her postgraduate education and compulsory residency training.
The ruling is important for students receiving stipends during higher education because the fact that a payment is called a stipend does not by itself determine its tax treatment. What matters is whether it is a scholarship granted to meet the cost of education, as covered by Section 10(16) of the Income-tax Act, 1961.
The ruling came in Snehlata, Rewari vs ITO, Ward-1, Sonipat, ITA No. 5462/Del/2026, for assessment year 2024-25. The order was pronounced on 30 July 2026 by the Delhi ITAT.
