Taxes Consolidation Act 1997 section 193

Income from scholarships

Section 193 exempts from income tax, USC and PRSI certain scholarship payments received by individuals in full-time education, subject to specific conditions for employer-sponsored schemes.

• Income from a scholarship held by a person receiving full-time instruction at a university, college, school or other educational establishment is exempt from income tax, USC and PRSI, with no income threshold applying to the exemption.
• The exemption applies only to the scholarship holder personally and cannot be transferred to any other person; the scholarship must promote the holder's education rather than research through the holder.
• Where a scholarship is funded by an employer (a "relevant scholarship"), the exemption applies only if no more than 25% of total payments from the trust fund or scheme in that tax year are attributable to relevant scholarships — otherwise a charge to tax arises on the employee or director.
• Fellowships are distinct from scholarships: post-doctoral or salaried research positions do not qualify for the exemption, and income from such fellowships is taxable under the PAYE system.