TDS Code for Salary Payment to Non-Resident Intern

To deposit TDS for a non-resident salary/stipend, select Challan ITNS 281 with nature of payment code 192 / 92B (or 1002 under Section 392), and report the transaction under Form 24Q.

Thank you for your guidance. Could you kindly share any circular or official reference regarding stipend payments to Non-Residents? We have observed that when selecting 'Non-Resident,' Code 1002 does not appear. Your advice on this matter would be appreciated.

The correct treatment depends on two factors: whether this is SALARY (Section 192) or a STIPEND/FELLOWSHIP (Section 195), and whether the non-resident is present in India during the internship.

SECTION 192 applies if:
- The intern is working under an employment agreement
- The payment qualifies as salary under Section 17 of the Income Tax Act
- The TDS return goes in FORM 24Q (even for non-residents receiving salary in India)
- Nature of payment code: 92A (Salary)

SECTION 195 applies if:
- The payment is a stipend, honorarium, or professional fee (not salary)
- The intern is a non-resident providing services
- TDS return goes in FORM 27Q (TDS on payments to non-residents)
- Nature of payment code: 9FI or applicable category

KEY POINT: If it is salary (employment relationship), you deduct TDS under Section 192 using the APPLICABLE DTAA RATE if the intern is a tax resident of a country with a DTAA with India (e.g., USA, UK, Germany). For DTAA benefit, the intern must provide Form 10F and a Tax Residency Certificate from their home country.

IF SALARY and the intern is in India for more than 182 days in the financial year, they become a RESIDENT under FEMA/DTAA and Section 192 applies at normal slab rates.

For the complete TDS return filing process including Form 24Q and 26Q codes, this [TDS return filing guide for employers](https://taxgarden.in/blog/tds-return-filing-form-24q-26q-employer-guide) has the nature-of-payment codes section.