Private ruling: Income - scholarship
Published: August 2011

Ruling: Q1: Is the part-time scholarship you received exempt income? | A1: No.

Relevant facts and circumstances: You are a part-time student, studying for a Graduate Certificate. You received a scholarship, paid in 2 instalments. You work full time.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 51-10, Income Tax Assessment Act 1997 Section 51-35 and Income Tax Assessment Act 1997 Section 6-5.

Reasons for decision: Detailed Reasoning - Detailed reasoning: Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources during the income year. Money received from a scholarship is ordinary income. If an amount is exempt income it is not included in the assessable income of a taxpayer under section 6-15 of the ITAA 1997. Section 51-10 of the ITAA 1997 provides that income received by way of a scholarship, bursary, educational allowance or education assistance by a full-time student at a school, college or university is exempt from income tax. The scholarship you received is not exempt from income tax because you are a part time student. As the amount received is income according to ordinary concepts and not exempt under any provision of the ITAA 1997, the income will be assessable. | Detailed Reasoning - Other relevant comments: ATO ID 2001/227 was reviewed which took into account a scholarship paid to a part time university student. The scholarship was not exempt from tax.

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