Exemption under section 10(14) for academic allowance

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  1. ca.shalinpatel

    ca.shalinpatel New Member

    Hello Friends,

    Need help w.r.t.academic allowance u/s 10(14) of IT ACT.

    One view is that it is allowed to those who work with education / research institutions only and have actually incurred amount for the purpose during previous year.

    Another view is that exemption is allowed to anyone who has actually spent amount and training / education / research should be from educational / research institute. training / education should be related to professional duties being performed. There is no clarity in law or rules; however, there is one judgement - in case of Madanlal Mohanlal Narang vs Assistant Commissioner Of Income tax (ITAT - Mumbai).
    It suggests that an employee of Shipping Corporation of India (working as electrical officer) was disallowed expenditure not due to the fact that he was not working with an educational / research institute but due to the fact that -
    1. He was working on a ship (for 6-8) months and hence it cant be said that the allowance was granted to him for "encouraging the academic research and training pursuits in educational and research institutions" &
    2. There was no material available to establish that the above condition is fulfilled in the present case.
    Link for the judgement for ready reference: https://indiankanoon.org/doc/176173/

    Going by this judgement, it appears that there is nothing to do with employment in education / research institution but allowance should be utilized by employee for the purposes it is granted for and which is in connection with professional duties being performed.

    I am CA working with financial advisory co and receiving this allowance. I want to pursue CFA and claim exemption for the expenses. Please advice whether it is allowable or not.

    Regards Shalin
  2. Deepak Surana

    Deepak Surana New Member

    Hi.. shalin

    Section 10(14) provides for "specific allowances"
    were, specific allowance ->
    • should be to cover the expenses incurred by the employee wholly, necessarily and exclusively for performance of his duties of an office or employment of profit.
    • not in nature of perq's u/s 17(2)
    here allowance received by you is described u/s 17(2) as perq's

    As per the information provided by you :
    • what u have received is perq as per sec 17(2)
    • and there is no expense incurred by you which is the primary motive behind the section.
    hence it shall be taxable.
  3. ca.shalinpatel

    ca.shalinpatel New Member

    Dear Deepakji,

    Thank you very much for the reply.

    As mentioned by you one of the specific allowances under section 10 (14) is - "any allowance, by whatever name called, granted for encouraging the academic, research and training pursuits in educational and research institutions''

    Now, Situation is as under -
    1. I want to pursue CFA course (which has direct relation with professional duties being performed)
    2. Whether amount which I will incur during FY201617 can be claimed as spent against the allowance which is received during FY201617 (Pls refer Rule 2BB (1) (e) of IT Act)

    Question is this exemption is for employees of educational / research institutes only OR available to any salaried person in general (provided other conditions are met)

    Hope it is clear. Thanks Again.

  4. ZED

    ZED Well-Known Member

    It is available to any salaried person it should be granted for encouraging the academic, research and training pursuits in educational and research institutions.
  5. Deepak Surana

    Deepak Surana New Member

    Referring to section 10(14) and rule 2BB there is no such further explanation which specifically provides that such exemption is for any particular type of persons or asseessee. hence should be available to every asseessee.

    you can claim such allowance as exempt u/s 10 for P.Y in which you incur related expenditure.

    thanks .. Shalin for further clearence...:)
    ZED likes this.
  6. ca.shalinpatel

    ca.shalinpatel New Member

    Thank you very much.
    ZED likes this.
  7. ca.shalinpatel

    ca.shalinpatel New Member

    Deepakji, Thank you.
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