Tax exemption to scholarships of medicos

Bhopal, May 02: The Indore High Court in an important verdict has exempted the scholarship given to the Post Graduate Diploma and Degree course students in the state medical colleges. The Junior Doctors Association (JUDA), Indore had filed the writ petition with the HC in 2007 against the IT department directing medical colleges to charge the income tax from their stipends.

The HC has upheld their plea that the stipend is not chargeable under the Income Tax Act. The court has also directed the concerned authorities to refund the amount charged from the students. SK Jain, counsel for the JUDA informed that the IT department had directed the medical colleges of the state for deducting income tax from the stipend given to the PG medical students. He added that Post Graduate diploma / Degree medical students are given stipends for paying their educational expenses. However the JUDA approached me for the advice in the matter after colleges started deducting the income tax as directed by the IT department, said Jain.

He added that he informed them that the scholarship is completely exempted from the income tax under section 10 (16) of the IT Act. Jain stated that they filed a writ petition with the Indore High Court in February 2007, when the Medical Colleges and IT department declined to accept their plea. He informed that the court upheld their plea that the scholarship is exempted under the provisions of IT Act. Jain informed that the Justice SK Seth, while delivering his justice has directed the authorities to refund the charged amount. “The verdict would be applicable to the entire state and all the medical colleges” said Jain.

He even claimed that the verdict might also be referred for future decisions. The counsel for JUDA informed that the concerned parties might appeal against the decision before the divisional bench of the Supreme Court. Though, Jain declined to comment that weather or not the IT department is going to move the Supreme Court in the matter. However he did inform that the charged amount would be refunded according to the official procedure.