TDS on stipend
This query is : Resolved
Ajay Mishra
(Expert)
09 December 2010
No
TDS on Stipend is not deductible.
TDS on Stipend is not deductible.
CA.ViVeK M ACA
(Expert)
09 December 2010
No TDS shall be applicable on stipend
10 December 2010
what about salary received during any training (internship) or probation period?
27 July 2025
Great question!
**TDS on stipend:**
* Generally, **stipend paid to students or trainees is not subject to TDS**, because it is usually considered a **non-taxable allowance or scholarship** unless specifically taxable under the Income Tax Act.
* However, **if the stipend is paid during internship or probation period and is in the nature of salary**, then it **may be taxable as salary income** and TDS under **Section 192** may apply.
---
### To clarify:
| Scenario | TDS Applicable? | Explanation |
| ------------------------------------------------------------- | ----------------- | --------------------------------------------- |
| Stipend to students (scholarship) | No | Not considered salary; generally non-taxable. |
| Stipend during internship/probation (fixed & regular payment) | Yes (Section 192) | Treated as salary; TDS deducted like salary. |
| Casual or irregular stipend payment | Usually no | Depends on nature; if not salary, no TDS. |
---
### Key points:
* The determining factor is whether the stipend is in lieu of **employment/salary** or just a **scholarship/allowance**.
* If the employer treats the payment as salary (even during training/probation), then **TDS on salary must be deducted**.
---
If you want, I can help you with sample TDS calculation or draft policies for stipend payments. Would that help?
**TDS on stipend:**
* Generally, **stipend paid to students or trainees is not subject to TDS**, because it is usually considered a **non-taxable allowance or scholarship** unless specifically taxable under the Income Tax Act.
* However, **if the stipend is paid during internship or probation period and is in the nature of salary**, then it **may be taxable as salary income** and TDS under **Section 192** may apply.
---
### To clarify:
| Scenario | TDS Applicable? | Explanation |
| ------------------------------------------------------------- | ----------------- | --------------------------------------------- |
| Stipend to students (scholarship) | No | Not considered salary; generally non-taxable. |
| Stipend during internship/probation (fixed & regular payment) | Yes (Section 192) | Treated as salary; TDS deducted like salary. |
| Casual or irregular stipend payment | Usually no | Depends on nature; if not salary, no TDS. |
---
### Key points:
* The determining factor is whether the stipend is in lieu of **employment/salary** or just a **scholarship/allowance**.
* If the employer treats the payment as salary (even during training/probation), then **TDS on salary must be deducted**.
---
If you want, I can help you with sample TDS calculation or draft policies for stipend payments. Would that help?
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