TDS on stipend

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bhavna

bhavna (Querist)
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09 December 2010 Is tax deductible at source on stipend?

Ajay Mishra

Ajay Mishra (Expert)
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09 December 2010 No

TDS on Stipend is not deductible.

CA.ViVeK M ACA

CA.ViVeK M ACA (Expert)
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09 December 2010 No TDS shall be applicable on stipend

bhavna

bhavna (Querist)
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10 December 2010 what about salary received during any training (internship) or probation period?

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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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.

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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?

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