ATO Interpretative Decision
ATO ID 2001/227 (Withdrawn)
Income Tax
Exempt income - part time studentFOI status: may be released
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This ATO ID is a straight application of the law and does not contain an interpretative decision.This 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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 a scholarship paid to a part-time student exempt from tax under section 51-10 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Decision
No. A scholarship paid to a part-time student is not exempt from tax under sections 51-10 of the ITAA 1997.
Facts
The taxpayer is enrolled as a part-time student at a university.
The taxpayer is offered a post-graduate scholarship as a part-time academic/research scholar.
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 educational assistance by a full time student at a school, college or university is exempt from income tax.
In general terms, for a scholarship to be exempt from income tax:
- (1)
- the taxpayer must be in receipt of a scholarship and the scholarship must be provided principally for educational purposes;
- (2)
- the taxpayer must be a full-time student at a school, college or university; and
- (3)
- there must be no condition that the taxpayer be an employee of the scholarship provider or enter into any contract with the scholarship provider that is wholly or principally for labour.
In this case, the post-graduate scholarship is not exempt from income tax because the taxpayer is a part-time student. The taxpayer does not meet one of the essential requirements set down by section 51-10 of the ITAA 1997 that is, the taxpayer must be a full-time student at a school, college or university.
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 under section 6-5 of the ITAA 1997.
Date of decision: 14 June 2001
Legislative References:
Income Tax Assessment Act 1997
section 6-5
section 51-10
section 51-35
Keywords
Exempt income
Scholarships, fellowships & bursaries
ISSN: 1445-2782
| Date: | Version: | |
| 14 June 2001 | Original statement | |
| You are here | 18 November 2005 | Archived |