US Senate tax reforms worry Indian students studying in universities
The waiver was not taxed, but under the new tax bill, the waived fees will be treated as income.
Hyderabad: The Tax Bill passed by the US Senate on Saturday will affect the savings of Indian students studying in US universities. While the Bill is good news for independent students, it will have a serious impact on students studying on scholarships or who get their tuition fees waived by working for the university. Graduate students who study abroad have the option of working as classroom teachers or laboratory researchers for which the university provides a tuition waiver. The waiver was not taxed, but under the new tax bill, the waived fees will be treated as income.
Chartered accountant Vishnu Venugopal said that according to the Indian Income Tax Act, a scholarship granted to meet the cost of education is not included in one’s total income.
“Generally, scholarships or waived tuition fees, which are considered as monetary help for students, are not taxed as it is purely for a student to continue his/her education. Increasing a student’s taxable income by including the benefits they receive is placing an additional burden on them,” he said.
An official from the US consulate in Hyderabad said, “We get a lot of applications from students to study in America and the number increases every year. Hopefully, taxing students on assumed income will not lead to a decline in the numbers.”