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Salary as stipend - urgent solution

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Asha Vaishnava

Manager - Finance & Accounts

290 Points Posted on 06 April 2021

Dear Sir/Madam,

in Karnataka as you are aware we have to follow minimum wages, we have new trainees and planning to pay as stipend which is around 10k to 15k. is it mandatory to follow the minimum wages which is above the stipend amount? what are the deductions they will have ?

Replies (5)

Quick Summary

This discussion addresses the critical question of whether stipends paid to trainees in Karnataka must adhere to the state's minimum wage regulations. It explores the distinction between a stipend and a salary, considering potential tax exemptions under Section 10(16) of the Income Tax Act for educational scholarships. The conversation also touches upon professional tax implications for payments above a certain threshold and advises checking resources like the Central Apprenticeship Council for definitive guidance.

yasaswi gomes

My grammar is 💯 good I

7306 Points Posted on 06 April 2021

The Income Tax Act has further laid down that ‘scholarship granted to meet the cost of education’ is exempt from Income Tax under the section 10(16).Now the question arises should we consider Stipend as ‘Salary’ or as ‘Scholarship’. For this we must review the terms under which such Stipend is paid

Is Stipend Income Taxable? (cleartax.in)