Section 10(17A) — the law in short
What the courts have decided on section 10(17A), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Statutory position — s.10(16) and s.10(17A): a scholarship granted to meet the cost of education, and an award or reward in the public interest, and what each of them actually requires
CBDT Circulars & InstructionsCuts both ways
My employer's trust paid my daughter's college fees and called it a scholarship, and separately I received a cash award from a State Government for community work. Is either of these taxable, and does it matter that no approval was mentioned?
The two clauses ask different questions and only one of them looks for an approval. Clause (16) of section 10 exempts 'scholarships granted to meet the cost of education'. There is no approval requirement in it, no ceiling, no condition about who the grantor is, and no requirement that the whole of the scholarship be spent. What it does require is that the payment be a scholarship and that it be granted to meet the cost of education. Clause (17A) exempts 'any payment made, whether in cash or in kind,— (i) in pursuance of any award instituted in the public interest by the Central Government or any State Government or instituted by any other body and approved by the Central Government in this behalf; or (ii) as a reward by the Central Government or any State Government for such purposes as may be approved by the Central Government in this behalf in the public interest'. Approval by the Central Government is required in two places there: for an award instituted by a body other than the Central or a State Government, and for the purposes for which a reward is given by the Central or a State Government.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.
