* 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.
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### 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. |
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### 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**.
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If you want, I can help you with sample TDS calculation or draft policies for stipend payments. Would that help?