ATO Interpretative Decision
ATO ID 2002/574 (Withdrawn)
Income Tax
Scholarship - CSIRO postgraduate scholarshipFOI status: may be released
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This ATO ID is withdrawn as the interpretative issue is covered in CR 2003/26This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is the taxpayer's CSIRO postgraduate scholarship exempt from income tax under section 51-10 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Decision
Yes. The scholarship is exempt from income tax under section 51-10 of the ITAA 1997 as the taxpayer was a full time student, the payment was made principally for education purposes and the taxpayer was not required to become an employee or enter into a contract with CSIRO.
Facts
The taxpayer is enrolled full time in a Ph D degree course at an Australian university and is in receipt of a CSIRO postgraduate studentship.
The taxpayer has not been appointed as an officer of CSIRO and is not bonded to CSIRO in any way while they are a student or at the completion of their studies.
The scholarship carries no guarantee of future employment in CSIRO.
CSIRO does not direct the taxpayer to do any particular pieces of work and does not have rights to the taxpayer's work as the work is of the nature of research undertaken in fulfilment of requirements of the Ph D degree.
Reasons for Decision
Item 2.1A of the table in section 51-10 of the ITAA 1997 provides that, subject to the exceptions and special conditions contained within section 51-35 of the ITAA 1997, 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.
Section 51-35 of the ITAA 1997 provides that the following payments made to or on behalf of a full-time student at a school, college or university are not exempt from income tax under item 2.1A of the table in section 51-10 of the ITAA 1997:
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- A payment by the Commonwealth for assistance for secondary education or in connection with the education of isolated children
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- A Commonwealth education or training payment
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- A payment by a person or an authority on the condition that the student will (or will if required) enter into, or continue to be a party to, a contract with the person or authority that is wholly or principally for the labour of the student
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- A payment under a scholarship where the scholarship is not provided principally for education purposes
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- An education entry payment under Part 2.13A of the Social Security Act 1991.
The taxpayer is a full time student at a university and receives a scholarship that is provided principally for educational purpose. The payments under the scholarship do not fall within the category of payments listed in section 51-35 of the ITAA 1997. Accordingly, the taxpayer's CSIRO postgraduate scholarship is exempt from income tax under section 51-10 of the ITAA 1997.
Date of decision: 5 March 2002
Legislative References:
Income Tax Assessment Act 1997
section 51-10
section 51-35
Part 2.13A
Keywords
Exempt income
Scholarships, fellowships & bursaries
ISSN: 1445-2782
| Date: | Version: | |
| 5 March 2002 | Original statement | |
| You are here | 18 November 2005 | Archived |