Archive · 16 Sep 2026
Delhi ITAT Clarifies Tax Exemption for Medical Student Stipends
A medical student received money while studying for an advanced medical degree.
The tax authorities said this money was salary and should be taxed.
The student said it was a scholarship meant to support her education.
A tax tribunal looked at the course and the required hospital training.
It decided that the payment was linked to her studies and compulsory residency training.
The tribunal therefore treated it as an educational scholarship under Section 10(16).
It removed the tax addition of ₹18,34,578.
However, the ruling does not mean every student stipend is automatically tax-free.
A postgraduate medical student received ₹18,34,578 from Aligarh Muslim University while pursuing an MS in General Surgery.
The Income Tax Department treated the payment as taxable salary, and the first appellate authority upheld the addition.
The student claimed exemption under Section 10(16) as an educational scholarship or stipend.
Delhi ITAT held that the payment was connected with postgraduate education and compulsory residency training.
The tribunal deleted the ₹18,34,578 addition, while emphasizing that not every payment called a stipend is automatically tax-exempt.
- Who
- Snehlata, a postgraduate medical student, and the Income Tax Department were involved in the dispute.
- What
- The Delhi Income Tax Appellate Tribunal deleted a ₹18,34,578 addition after treating the stipend as connected with education under Section 10(16).
- When
- The order was pronounced on 30 July 2026 for assessment year 2024-25.
- Where
- The case was decided by the Delhi Income Tax Appellate Tribunal; the stipend was received from Aligarh Muslim University.
- Why
- The tribunal found that the payment was linked to postgraduate medical education and compulsory residency training rather than simply being salary.
Income Tax Authorities
Student and Tribunal
Tax treatment of the payment
Income Tax Authorities
The Assessing Officer treated the entire ₹18,34,578 as taxable salary, and the first appellate authority upheld that treatment.
Student and Tribunal
Snehlata claimed the amount was an educational scholarship or stipend exempt under Section 10(16). The Delhi ITAT accepted that it was connected with her postgraduate education and compulsory residency training.
Meaning of a stipend
Income Tax Authorities
The authorities did not accept the payment's characterization as an exempt educational amount.
Student and Tribunal
The tribunal held that the payment's purpose and connection to education mattered more than simply labeling it a stipend, while noting that employment remuneration would not automatically be exempt.
- Case
- Snehlata, Rewari vs ITO, Ward-1, Sonipat
- Tribunal
- Delhi Income Tax Appellate Tribunal
- Amount
- ₹18,34,578
- Course
- Full-time MS in General Surgery
- Payer
- Aligarh Muslim University
- Tax provision
- Section 10(16) of the Income-tax Act, 1961
- Decision date
- 30 July 2026