Dinesh Divekar
Business Mentor, Consultant And Trainer
Labour Law & Hr Consultant
Primus Techsystem

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Dear All, We are a software company. Also we are running training institute. The trainee students from the Institute are working with the company as trainee consultant. These Trainee are drawing Stipend. I would like to know that whether the stipend paid to trainee is free from at source income tax deduction. To have more clarity I hereby add that the Fees paid by the student are properly covered under GST as AICTE approval is not there for the courses.
Whether this stipend concept is correct and if it correct up to what amount this can be made.

From India, Pune
Dear Ramakant,
Treatment of stipend received by trainees or students as "income" under the Income Tax Act with the exception of medical students pursuing higher studies remains still a debatable issue. By the by, whether the stipend paid to such trainee consultants exceed Rs.250000-00 p.a?

From India, Salem
Dear Mr.Umakanthan M. Thanks for your immediate response. The stipend will be for three months @ Rs.8,000 per month. Ramakant
From India, Pune
Dear Ramakant,
Since the annual remuneration exceed Rs 30,000/- the disbursement of stipend attracts "Tax Deduction at Source" (TDS) @ 10% u/s 194J of IT Act, 1961.
In fact your accounts department should have educated you on this.
Dinesh Divekar

From India, Bangalore
Thanks divekar sir, since the stipend is payable for 3 months @ 8000 hence i think no tds term is applicable. Regards ramakant
From India, Pune
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