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Stipend income

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Piyush Agrawal (Querist)
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03 September 2013 Dear All,

I have a confusion,if we are giving stipend to any employee(labour class)for full year approx Rs.250000 then will it be taxable in any section,
are we liable to deduct TDS for the same,if yes then in which section 192B or 194C.

My frnds are advising me that stipend is fully exempt but if so then companies will have the option to claim extra expenditure at the name of Stipend.
Kindly assist.

CA SHYAM LAL SHARMA

CA SHYAM LAL SHARMA (Expert)
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03 September 2013 I think stipend must be an income under the head salary . Accordingly TDS should be deducted u/s 192B. It is because there is an employer employee relationship between the principal and article. There is no any principle to principle relationship between these two parties. Hence , It can not be subject to contract for imposing prov u/s 192C although there is any agreement between the employer and employee for term and condition of articleship.

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