Student gets Rs 18.34 lakh stipend from university and pays no income tax; gets notice from Income Tax Department; she wins the case in ITAT Delhi for this reason

When Smt Lata from Rewari, Haryana, got a Rs 18.34 lakh stipend from the Aligarh Muslim University for her PG Medical education and the compulsory residency training, she took advantage of the Section 10(16) tax exemption and paid no taxes.

For those unaware, Section 10(16) states that if a student is awarded a scholarship or stipend to cover their educational expenses, it’s tax-free. In this case, Smt Lata is a full-time student pursuing Post Graduate degree course in General Surgery.