For obtaining the degree of Chartered Accountancy Course, one needs to go through practical training from practicing CA firms for certain duration. In lieu of such training, the Institute of Chartered Accountants of India (ICAI) prescribes payment of stipend. Such practical training is required to be completed even if the student clears the CA examination during the training period. Thus the practical training is an integral part of the CA Course.
In this context, the decision of ITAT Jaipur in the case of Sudhir Kumar Sharma vs. ITO is worthy to mention. In this case, it was held that stipend received by an articled clerk from a chartered accountant is exempt under Section 10(16). The reason given by the Tribunal was that the stipend is paid to meet the cost of books, coaching fees, examination fees, and so on and hence stipend is not taxable is taken in the light of section 10(16).