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Edited version of private advice
Authorisation Number: 1052372913754
Date of advice: 17 March 2025
Ruling
Subject: Income - scholarship
Question
Is your scholarship paid by my university exempt from income tax under section 51-10 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes. Your scholarship is exempt income as it meets the conditions set out in section 51-35 of the ITAA 1997.
In your case, you are a full-time student, you have received a scholarship there are no conditions attached to the scholarship that require you to enter into any contract or be an employee of the scholarship provider. Additionally, the scholarship payments are principally for educational purposes. Therefore, your scholarship income payments are exempt from tax under section 51-10 of the ITAA 1997 and do not form part of your assessable income.
This ruling applies for the following periods:
Year ending 30 June 20YY
Year ending 30 June 20YY
Year ending 30 June 20YY
Year ending 30 June 20YY
The scheme commenced on:
XX XX 20XX
Relevant facts and circumstances
You are a full-time student.
You are receiving a scholarship.
The scholarship is paid in semester instalments over three years, the funds are to be spent on educational purposes.
The terms of Scholarship will be for 3 years, based on a standard full-time enrolment program.
The scholarship program includes two mandatory 15-weeks full time work placements, to be completed during the first semester of your second and third years of study.
Placements will be assigned to you by your university based on the needs of the sponsor.
Work placements are unpaid and do not constitute employment with the sponsor.
Internships are not a guarantee of future employment with the sponsor organisation.
You may be required to sign a non-disclosure agreement and/or an intellectual property assignment agreement with the host organisation.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 6-5
Income Tax Assessment Act 1997 Section 51-10
Income Tax Assessment Act 1997 Section 51-35