Snehlata Vs ITO (ITAT Delhi)
Compulsory Hospital Residency Is Part of Medical Education—Stipend Received by PG Doctor Exempt Under Section 10(16): Delhi ITAT
Summary: The Delhi Bench of the Income-tax Appellate Tribunal has held that a stipend received by a qualified MBBS doctor while pursuing a full-time postgraduate medical course, including compulsory residency training in the hospital, constitutes a scholarship granted to meet the cost of education and is therefore exempt under section 10(16) of the Income-tax Act, 1961. Merely because the student undergoes practical or clinical training in a hospital, the educational stipend cannot automatically be characterised as salary.
Facts of the case
The assessee was a qualified MBBS doctor pursuing a full-time postgraduate degree course in MS (General Surgery) at Aligarh Muslim University. As part of the postgraduate programme, she was also required to undergo compulsory residency training.
During the relevant previous year, the assessee received a stipend of ₹18,34,578 from Aligarh Muslim University. She claimed that the amount was received solely in connection with her postgraduate medical education and compulsory residency training. Accordingly, the stipend was claimed as exempt under section 10(16), treating it as a scholarship granted to meet the cost of education.
The Assessing Officer, however, treated the amount as taxable salary and added it to the income of the assessee. The Commissioner (Appeals)/National Faceless Appeal Centre sustained the addition. The assessee therefore approached the Delhi Tribunal.
