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Scholarships - Income Tax
Is my scholarship taxable?
Scholarships and bursaries are normally exempt from income tax provided that all of the following conditions are fulfilled (s51.10 Income Tax Assessment Act 1997 (Cth)):
- the payment is to a student enrolled as a full-time student
- the scholarship is provided for educational purposes and not as part of an employment agreement
- the student is not required to be, or become, an employee of the University or a scholarship sponsor as a condition of the scholarship, and
- the terms of the scholarship do not amount to a contract for labour with the scholarship sponsor or the university.
Stipend payments to students who are part-time enrolled may be subject to income tax. If applicable, the University usually withholds income tax to prevent students from accumulating a tax debt. However, lump sum payments for part-time enrolled students of a studentship, scholarship or prize will not have tax withheld but may need to be declared as assessable income in your tax return.
The Australian Taxation Office (ATO) provides a step-by-step eligibility guide for you. Scholarship recipients are advised to obtain independent tax advice to ensure that their individual circumstances are covered.